Follow us on Twitter!
Blog Header Logo
DG&A's Transportation Consulting Blog
Posted by on in General
  • Font size: Larger Smaller
  • Hits: 15527
  • 0 Comments
  • Print

The latest “State of the Freight” Report Highlights Shippers’ Expectations of Higher Rates

Wolfe Trahan & Co. is a Wall Street research firm that has a strong focus on freight transportation. Each quarter they survey several hundred American shippers in a variety of industries and create an extensive report that documents their findings.

The Q1 2011 report, issued in March, summarized data collected towards the end of the fourth quarter 2010. Excerpts from the report were captured in a recent Supply Chain Digest On-Target Newsletter. Among the highlights, shippers are expecting freight rates to rise significantly over the next 12 months with the overall average in the range of 6.5 percent (including fuel). This reflects increases in both shipping volumes and freight rates. They also see the supply/demand pendulum swinging back in the carriers’ favour. Shippers predict the highest rate increases over the next 12 months in intermodal, followed by ocean shipping, truckload carriage, and rail.

Capacity has been a hot topic over the past year. Despite the recent improvements, however, a strong 77% of respondents expect to see very tight or somewhat tight truckload capacities over the coming year. Wolfe Trahan says this is the highest number seen on this measure since mid-2004, and notes that was followed by a multi-year pricing upswing for the carriers and a mini-"capacity crisis" in 2005-06. The company believes some of the concern about TL capacity stems from what shippers perceive as the potential impact of new U.S. government regulations, specifically CSA 2010 and proposed new changes to current Hours of Service rules. The report found an amazing 92% of shippers were opposed to changing the current maximum driving time of 11 hours down to 10, as the U.S. Federal Motor Carrier Safety Administration is considering right now.

Shippers expect truckload rate increases before fuel surcharges to average 3.1% over the next 12 months. On the LTL side, the vast majority see the market right now as "balanced"; with only 6% perceiving tight LTL capacity.

As a result of the combined impact of tighter truckload capacities and higher rates, shippers expect a rather significant increase in the percent of their freight volumes that will go intermodal. Thirty-eight percent of shippers are looking to move more freight via intermodal versus over the road truckload, up from 30% in Q3. Another 16% said they had already moved freight from truck to intermodal over the past year. This was the largest shift from truck to rail since mid-2008. About 36%, however, said they would not move any freight away from trucking because intermodal shipping did not meet their business or transport needs.

Other highlights of the report include:

  • Thirteen percent of shippers have already fully integrated CSA 2010 BASIC safety rankings into their carrier selection process, and another 72% say they will do so in the future, leaving just 15% in total who did not indicate they planned to do so. Additionally, 66% of shippers said they had entered into discussions with current carriers which were flagged with alerts from the safety reporting system.
  • Thirty-eight percent of shippers say they have seen parcel shipment costs rise as a result of the new approaches to dimensional weighing (DIM) taken by UPS and FedEx at the beginning of the year, including 11% saying the result was at least a 5% increase in parcel shipping costs. Twenty-six percent of respondents, however, say they have been able to negotiate no changes to those formulas.
  • Shippers see ocean freight rates decelerating. On average, respondents expect ocean rates to increase 2.7% this year, down from expectations for a 3.9% increase in rates last quarter. Wolfe Trahan says spot rates have declined of late 27% from their 2010 peaks.
0

Comments

  • No comments made yet. Be the first to submit a comment

Leave your comment

Guest Sunday, 01 February 2015

Most Recent Posts

Search


Tag Cloud

shipping wine Shipper Retail Freight Management TMP Worldwide New York Times peak season Freight Carriers Association of Canada Consulting Carriers Management Canada-U.S. trade agreement YRC Blogging USA Truck President Obama freight transportation conference US Auto Sales shipping CSX NS FuelQuest 2014 freight volumes Facebook freight transportation Transportation Buying Trends Survey Amazon economic forecasts for 2012 freight transportation in 2011 fuel surcharge capacity shortages Dedicated Trucking Truckload Scott Monty truck driver Social Media CN Rail $75000 bond Broker Driver Shortage University of Tennessee 2014 economic forecast Twitter Werner Canadian truckers broker security future of freight industry Canada's global strategy US Economy truck drivers NCC Bobby Harris network optimization Canada home delibery Derek Singleton cheap oil RFP Right Shoring Retail transportation Microsoft freight audit freight forwarders Canadian economy US Manufacturing bulk shipping Social Media in Transportation Keystone Pipeline Failure Infrastructure freight cost savings LinkedIn CP Rail David Tuttle Global Transportation Hub Transplace broker bonds NAFTA CSA Canada U.S. trade Canadian freight market Canadian Transportation & Logistics KCS Spanx driver shortages buying trucking companies TMS LCV's 2012 Transportation Business Strategies. Jugaad LTL CRM economy FMS Global experience Rate per Mile IANA CSA scores professional drivers Business Strategy shipper-carrier roundtable transportation news Map-21 Reshoring Freight contracts Distribution Transloading Omni Channel Success EBOR Adrian Gonzalez Horizontal Supply Chain Collaboration transportation newspaper freight costs US Housing Market Toronto Tracy Matura Transcom Fleet Leasing Masters in Logistics financial management Rail FCA freight rate increases TransForce selling trucking companies NMFC Career Advice hiring process Fire Phone Swift Dan Goodwill Associates carrier conference intermodal Finance and Transportation Doug Davis Software Advice e-commerce BlueGrace Logistics Freight Celadon ShipMax Deferred Packaging customer engagement Entrepreneur shipper-carrier collaboration Sales Management Climate Change freight broker Stephen Harper Trade Vision Search engine optimization Wal-Mart FMCSA MPG ProMiles Railway Association of Canada 2013 Economic Forecast Emergent Strategy energy efficiency Business Transformation Strategy freight payment freight audit driver Harper Davos speech BNSF MBA dimensional pricing CN Schneider Logistics JB Hunt Regina Freight Rates Success failure entrepreneur freight agreements FCPC Doug Nix APL Transportation service Loblaw Ferromex freight payment trucking company acquisitions 2014 freight forecast Conway Colilers International Crude Oil by Rail Surety bond Business skills Dedicated Contract Carriage Transport Capital Partners (TCP) Rotman School of Business CITA Shipper Pulse Survey UP Trucking Driving for Profit Packaging 2015 Economic Forecast Warehousing Hudsons Bay Company 360ideaspace Load broker Transportation solutions provider Freight Capacity

Blog Archives