Hopefully that headline has grabbed your attention!
The term “Perfect Storm” has at times been overused. But there have been times, like 2021 and 2022, where a confluence of events and issues resulted in the “Perfect Storm” that caught shippers by surprise and caused their freight costs to skyrocket. Right now, there are storm clouds gathering on the horizon that could once again cause your freight costs to skyrocket in 2025. And that is why it is important to understand these issues and the potential impact they could have on your freight budgets.
Overall, looking to 2025 and 2026, we are seeing signs that shippers could once again be dealing with a tough market. For example, when Ann Warner (from the NIT League) and I were being interviewed by Mark Willis last week on his Sirius Radio Road Dog Trucking program, we talked about Craig Fuller’s FreightWaves article “The Great Freight Recession is officially over”.
The article highlighted factors that will affect truckload capacity and demand in 2025. For example, on November 18, we could see the start of a process that could eventually result in 177,000 truck drivers losing their CDL due to FMCSA regulations requiring the states to basically pull licenses from drivers who are in prohibited status. And if President Trump imposes tariffs, shippers may pull orders forward and spike demand. If these things happen truckload rates are likely to rise and these increases could be sizeable. And the surge in shipments could cause ocean rates to once again spike as they did in 2021 – 2022.
As we have discussed in prior Two Minute Warnings, in the LTL market, when the changes in the freight classification go in to effect in July, 2025, shippers could see their LTL costs go up. And it could cause substantial variances between what shippers bill to their customers for freight costs versus what they pay to their carriers.
We’re also seeing concerns for shippers in the parcel market as well. With both carriers facing challenging financial situations, FedEx and UPS need to generate as much revenue as possible from accessorials as well as general rate increases.
On an immediate basis, in the truckload sector we encourage you to contact us if you like to learn more about three things that shippers should be doing right now to protect their pricing and capacity or service in 2025. And we have also been sharing valuable insights on how to manage LTL sourcing events. If you’re really serious about protecting your supply chain and managing your freight costs in 2025, let’s connect. Simply give us a call, send me an email, or let’s meet via Calendly.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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