Optimistically face market change & uncertainty.
The summer freight market got off to a hot start – which is only fitting considering July was widely reported as the hottest month ever recorded on Earth. But even as one of the market’s more constructive periods in a while, summer also came packed full of disruption.
Succeed in today’s complex market by:
maximizing current (particularly low) freight rates
mitigating risk amidst increased volatility
getting more from your LTL shipments
Make the most of low – but rising – freight rates.
Spot rates.
Despite some 4th of July disturbances, spot rates sit ~1% lower starting Q3 2023 than in Q2 – but expect them to trend higher in the coming months due to rising diesel costs, carrier exits, seasonality, and a major storm or two.
Contract rates.
These rates ended Q2 nearly 4% lower than expected – either meaning that they’ve now officially hit bottom or will drop 1-2% more before hitting their low within a few months. Either way, they will likely journey back to equilibrium and into the next Y/Y inflationary leg by mid-2024.
What this means for shippers & carriers.
Shippers should secure contract rates now while they’re near their lowest, and fill in any gaps with still-low spot rates.
Carriers would be wise to utilize spot rates now even though they’re still low, and wait to secure contract rates – which are currently very close to rock bottom – until they rise.
Mitigate your risk in tumultuous times.
The threat of major disruption seems to be the new normal in logistics, particularly for the less-than-truckload (LTL) shipping market. In this summer alone:
the bankruptcy of Yellow, one of the nation’s largest LTL carriers, had shippers worried about lost cargo, capacity constraints, and higher prices
the now-resolved UPS and Teamsters contract negotiations had companies anticipating 340,000 drivers off of the road by shifting goods typically handled by UPS to other vendors and considering alternative modes
wildfire smoke shut down the Port of New York and New Jersey, trapping goods in the busiest container port on the East Coast
Despite all the disruption, the demand for freight isn't slowing down. But passing LTL shipments through terminals makes them vulnerable to disruptions of all kinds, and avoiding LTL’s inefficiencies by paying for a costly truckload (TL) that won’t be filled – with 45 percent not even reaching half-capacity – hurts shippers’ bottom lines.
To top it off, increased market volatility only makes these traditional methods less reliable and more expensive to navigate.
Implement tools that help combat disturbances.
Thrive, not just survive, in this less-than-reliable market by introducing alternative shipping methods, such as FlockDirect®. Powered by our patented shared truckload technology, FlockDirect® prevents traditional methods’ inefficiencies by offering:
shippers flexibility to withstand disruptions and cut costs by up to 20%
carriers access to more load options to earn up to 25% more per haul
Get more from LTL.
Maximize your operations’ efficiency by ensuring less-than-truckload (LTL) is the right choice for your freight and enhancing its effectiveness with reliable tracking and ideal rates.
Track your LTL freight.
Having visibility over your freight helps lower your stress and proactively support your customers. For reliable tracking, you’ll need to:
select where to quote and book your shipment
complete a bill of lading (BOL), which helps avoid or recover lost shipments
use a carrier-provided identifier, such as a PRO number, to get location updates
Determine costs.
Because multiple LTL shippers split the price of a truck, LTL can cost significantly less than a full truckload. However, your final price will largely be determined by whether you select a:
fixed, long-term contract rate
one-time, market-dependent spot rate
Compare LTL to other shipping modes.
While shipping LTL can be a great option for midsize freight, it’s important to review all your options before selecting a shipping method. When it comes to LTL vs. other modes:
TL is more expensive but delivers faster with less damage and loss
PTL typically weighs more and travels through less consolidation points and, thus, damage-inducing handling
STL delivers faster with less handling/risk of damage, no accessorial fees, and no freight class requirements or weight minimum
Hear from the truck drivers keeping the supply chain moving.
Curious about life on the road? Watch Truck Stop Talks to hear first-hand stories from truck drivers.