LTL Rates Expected to Rise More Than 5% This Year

Well, it is finally here. The day truckers will be able to get the rates they need without the haggling, so shippers need to be prepared. The trifecta of tightening capacity, increased demand and the ongoing surge on e-commerce deliveries has come in and it will pay big benefits for the trucking industry. Adding to the issue further is the increased cost of trucking equipment. Tractor costs are up sharply due to emission and safety standards. Trailer costs are up due to increased material and labor costs. So, buckle up if you’re an LTL shipper. Truckload shippers won’t fare much better.  If that’s not enough, mandatory logging devices are costing large carriers millions of dollars to install and manage. 

Limited Carrier Choices

There have been no significant new carriers entering the market in the last few years. While there have been a couple of significant mergers and acquisitions, the largest and most recent being the XPO Logistics purchase of Conway Freight Lines. This move did not increase capacity by any significant amount but was an effective marriage of assets and efficiencies. There may be some opportunity for value with some of the small local carriers, but the national and regional carriers are in a commanding position. “I’ve been in this business for 60 years and the only time I’ve seen capacity shortages worse was during World War II,” says Shevell, chairman of the Shevell Group, parent of New England Motor Freight, the leading LTL carrier in the Northeast. NEMF is celebrating its 100th anniversary this year, one of only a handful of trucking companies to reach that mark. “Shippers had better prepare themselves because it’s a new era of doing business,” according to Mr. Lavell. “You’re not going to be able to beat up their trucking companies any longer because you won’t be able to have any trucks." And Shevell emphasized that new reality is not some forecast for 5-10 years down the road. “It’s reality,” he said. “It’s here now.”

The Time Has Come to Plan to Ship Smarter

There is a myriad of ways to manage your shipping costs this year and ensure your freight gets moved. They range from trimming excess weight, maximizing packaging protocols, combining shipments just to name a few. How do you know which areas on which to concentrate? Then, how do you know which carriers to negotiate on which lanes. Most manufactures are experts on what the make, not always how to ship what they make. Perhaps now, more than ever, is the time to consult an expert on the most effective areas of your supply chain needs improvement. Also, different carriers have preferred lanes. Knowing which carriers desire and best serve which lanes is critical to maximizing your delivery efficiencies and transportation spend. If you’re not sure about any of these aspects of your supply chain Land Link Traffic Consultants can help. Let us review your current supply chain methodology and make recommendations. Contact us today at www.Land-Link.com.