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It seems like just yesterday we were all carefully monitoring the looming COVID-19 crisis and its effects on the industry. It’s hard to believe that we’re already well in the midst of the 2020 intermodal peak season and gearing up for the holidays, but here we are. The pandemic continues, but with shutdowns mostly out of the way and increased consumer spending, things are looking up.

What we're seeing

We decided to take a look at our data and make some inferences on the state of intermodal right ahead of the holiday season in the most unprecedented year yet.

Earlier this year at the height of the crisis, there were low volumes industry wide. At this time, the DrayNow platform was seeing lower average spot rates with a flush capacity base taking these lesser paying loads. As the market made a rebound, rates increased and capacity tightened. This last trend is in line with what we saw at this time in 2019, with rates making their steady descent upwards as peak season commenced.



It’s no secret that around this time of year, even in normal times, intermodal capacity is tight. It’s an industry-wide occurrence that affects each and every player trying to move freight on and off the rails. With these capacity constraints, rates tend to increase to higher levels. Such is the case with our own historical data, where spot rates in our key markets hit highs towards the end of 2019. Based on last year and some of our more recent trends, it’s expected that overall rates will only be going up from their current position.

The State of Intermodal

After incredible fluctuations in volume & rates paired with service issues at the rails in key markets, it appears that the overall intermodal market is stabilizing. Volumes have been hitting significant levels in the past few months, even seeing consistent year-over-year increases in traffic. As volumes increase, capacity tightens and thus rates go up.

Besides lower volumes across the industry, another set of concerns facing intermodal this past year were equipment & service issues, which we forecasted back in May. The main issues here being container shortages in Los Angeles as shutdowns disrupted the usual flow of freight over the rails. At this point, some of the congestion appears to be subsiding just ahead of peak season as things get back on track.

Where DrayNow can help

There are more carriers signed up with access to the DrayNow marketplace than ever before. Our platform also utilizes a previously untapped source of capacity: independent owner operators. This creates capacity without having to fight for a limited pool of capacity by relying on the traditional drayman for all intermodal moves.

Our technology also allows us to monitor trends in service (i.e. wait times at warehouses) and other pieces of data to help users effectively manage their freight. In terms of securing capacity, we have tools available to help determine a competitive price for their freight based on current marketplace conditions. If the price is right, carriers will pick up loads right from the app and customers will be to track the progress on those moves in real time.

Final word: The 2020 holiday season in an incredibly unusual year may cause a few headaches still stemming from issues earlier in the year, but the industry as a whole is nowhere near what it was just a few months back. Capacity will be tight as per usual, but competitive pricing along with tapping into the power of the independent owner operator through technology can help alleviate those concerns.

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