Market Insights: What’s happening with freight Prices (May2022)?

May

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Using information from our carrier network, this article will provide the most up to date data on what’s happening with freight prices.

Many organizations we work with are experiencing the effects of market volatility. As a part of our account management practices, we want to share our insights with you and your team. These insights will be shared with additional guidance provided as disruptions occur. The information is built on market data from public sources and Freightquote by C.H. Robinson’s information advantage, based on our experience, data, and scale. Please use these insights to stay informed, make decisions designed to mitigate your risk, and avoid disruptions to your supply chain.

LTL: Capacity is expected to trail LTL tonnage growth in 2022

A possible 1–2% increase in terminal throughput is expected from the investment in dock and door expansions. Key to LTL capacity is not only trucks, but the nodes/docks where freight is cross docked or optimized. With an ACT Research forecast of 3% growth Y/Y in tonnage, available capacity challenges and pricing pressure will continue through 2022.

Carriers need additional capacity to handle not just temporary spikes, but long-term increases in their volumes propelled by ecommerce. LTL capacity expands much more slowly than in other sectors of trucking since LTL capacity expansion is centered on the terminal hubs. Those nodes are capital projects that take time, but when completed increase volume and velocity.

LTL: Ongoing LTL pricing pressures

Expect pricing pressure from the LTL carrier community to continue as they face ongoing challenges to expand terminals, tractors, and trailer capacity against stronger freight forecasts than truckload.

Fuel surcharges will also continue to impact overall freight spend and some shippers are forecasting increased fuel expenses into their freight budgets.

Your C.H. Robinson representative can help develop a diverse carrier strategy to help lessen the impact of market price and service challenges—so you can prepare for today and potential Q3 and Q4 pressured markets.

Ocean imports volumes impact North American surface transportation:

Ocean vessel carriers are queuing vessels along the extended route from Asian origin to LA/LB ports in an effort to minimize vessel bunching directly outside of terminals & improve efficiency on vessel operations.
There has been a shift in volume demand since Q4 from U.S. West Coast to U.S. Gulf and U.S. East Coast ports. Carriers have responded by increasing the capacity to these port regions.
West Coast labor discussions began last week. Both parties are reported to remain positive as they work through the contract, which expires on July 1, 2022. If no agreement has been reached by then, most likely a contract will be extended and they will continue to work through items needed on both sides.

Lower volumes of air freight imports from Shanghai have reduced pressure at U.S. airports. As a result, road carrier experiences are more favorable with dwell times closer to historical norms.

Small Parcel: Ecommerce, large parcels creating combined parcel and LTL solutions

Overwhelmed with big packages, both UPS and FedEx implemented surcharges to mitigate costs associated with handling them. Small parcel sort facilities are equipped to handle certain size packs, but with ecommerce driving the need to move larger, bulkier items (e.g., dog food, appliances, exercise equipment, etc.) LTL carriers are stepping in to help move these larger shipments—not only in the middle mile, but the final mile as well.