2019 was a Shipper’s Market

Record truck orders and record freight volumes in 2018 served as the backdrop for a significant correction to the market in 2019. The year began with a plethora of trucks and freight volumes underperforming expectations. It is estimated that there are approximately 75,000 more tractors available than there is freight to fill them.¹ Shipments became easier to cover, and as a result, carrier rates were historically low. Even though economic growth continued in an upward trajectory, it was at a much slower pace than the previous year and not enough to compensate for the overabundance of equipment.

Cargo theft is an unfortunate by-product of the holiday season that often gets overlooked during the hustle and bustle of rushed shipments and tight delivery schedules. That is until a trailer disappears, or pallets go missing off the company’s loading dock. With employees taking extra vacation days around Christmas and New Year’s, freight is often unattended or stored in places where prolonged absences provide a greater opportunity for theft.

And what you can do about mitigating LTL costs ... 

LTL rates have remained high since the freight recession hit in Q4 of 2018, and to some, this is hard to understand. Conventional wisdom says that when market pricing for truckload shipments rises, so does Less-than-truckload (LTL) pricing.  Conversely, when truckload pricing dips, so should LTL, but we are beginning to see a shift in the industry that is far from normal.

Offering Customers Something More ... 

“The recent freight recession has affected the freight industry in a number of ways, making it critical for companies to maintain more direct communications, streamline processes and gain greater visibility in order to remain successful. Largely driven by excess capacity in the market, freight recessions signal a time for brokers to step up their offerings and deliver a true competitive advantage to the market to separate themselves from the competition.” - Freightwaves webinar: The Battle of the Broker: How the Freight Recession Has Impacted the Broker Market

Differentiation

There are over 20,000 freight brokers in the United States. Differentiation can be difficult when every 3PL likes to claim excellent pricing, communication, customer service, and the ability to track shipments. If you are a freight broker and don’t provide those key benefits for all your services, chances are you won’t be for long.   

Is the Freight Market Recession Improving?

Tracking packages is nothing new. Companies like FedEx and UPS have been doing it for decades. In 1994, UPS first offered customers access to a new bar-coded tracking technology. It was a huge success and enabled the company to grow exponentially.

Commercial freight carriers, on the other hand, have been slow to adopt instant tracking with the burden (and complication) of too many moving parts involved in the supply chain. With so many hands in every freight transaction, it is a miracle the process works as well as it does today.

According to Wikipedia.org, hurricane season starts in the Atlantic the first of June, but it seems official now with the threat of Dorian hitting the Florida coast sometime in the next 72 hours. The National Weather Service says it is currently a category three but is predicting it will reach category four status by the time it reaches the coast. Like a nail-biting horserace, no one is sure what to expect at the finish line until the final moment of impact.

The U.S. DOT announced today a series of newly proposed changes to the 2013 hours-of-service final ruling. These changes will give drivers more flexibility and are a result of feedback from industry organizations and individuals who have been affected by the 2017 electronic logging device (ELD) mandate.

When temperatures reach 98 – 100 degrees with heat indexes as high as 115, like last weekend in Maryland, everything cold gets warm incredibly fast! During these extreme temperatures, many shippers are requesting that even fresh loads run at 26 degrees instead of 28. 

The extra costs that occur on an LTL shipment’s bill of lading, called accessorial fees, are not really hidden costs. They are fees for added services that some loads require by the nature of the cargo. They are fees on top of the initial quote that LTL freight companies charge.