Wait times plummet as capacity tightens

Chart of the Week:  Wait Time Index, Outbound Tender Rejection Index – USA SONAR: WAIT.USA, OTRI.USA

Shippers are struggling with a volatile freight market for the second time in three short years as carriers are rejecting load tenders at rates not seen since the middle of 2018, the mythical anomaly of a year. One of the side effects has been that carrier wait times have fallen in a near-perfect inverse proportion to national tender rejections. The question remains: How much of this relationship is a direct result of a shift in leverage to carriers?

One of the biggest challenges for carriers is managing wait time or detention at a dock. Most truckload carriers build one to two hours into their rate for loading and unloading. Too much variance can throw off the carrier’s ability to pick up the next loads, which are probably time-sensitive. 

Looking at the relationship between the average carrier wait time and tender rejections, it would appear that shippers and consignees attempt to assist the carrier by loading and unloading more efficiently. As tender rejection rates fell from 25% to 10% (meaning capacity increased) in the second half of 2018, wait times rose almost 11%. Wait times continued to trend higher through February 2020, topping out around 160 minutes.

The trend reversed course in March and fell through June before bouncing from 103 to 108 minutes in July. Even though there is an implied connection between capacity and wait time, that is probably not all of the answer considering the environment is much different now, which is the understatement of the year. 

Other possibilities for the strong decline in wait times include: 

  • Distancing measures.
  • Technological improvements.
  • Improved operational efficiency around the dock.
  • Low volumes (in April and May).

Some of these overlap and it is not an exhaustive list, but seeing as shippers and consignees have been forced to alter their behavior, there has certainly been a downstream impact, both good and bad, to carriers. 

The Wait Time Index is created off telematics and geofencing data. Because of social distancing, there is the possibility that carriers have to now wait outside the normal waiting area, which is outside of the geofence, therefore creating the illusion of reduced wait time.

Shippers now have reason to invest in technology around their dock to ensure everyone is safe: technology like smart docks that notify you when a trailer has been waiting too long or programs that improve staging efficiency.

Shippers have to practice social distancing as much as anyone, which means they need to revisit their operation and make changes to ensure the safest protocols. Many facilities have not looked at their dock operation in many years and could have discovered improved methods that reduce wait times.  

Low volumes only applies to the early part of the recovery process in April and May. Less freight means less to load, which streamlines the process to only a few trailers at a time. This certainly does not apply now. 

While tightening capacity may not be the only explanation for faster loading times, it certainly can explain part of it. Hopefully for carriers, improved operational efficiencies explain more of it than anything. Otherwise there will be a repeat of 2019 when capacity loosens again. 

About the Chart of the Week

The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.

SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.

The FreightWaves data science and product teams are releasing new data sets each week and enhancing the client experience.

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