How Will the Freight Recession Impact Your Supply Chains and Freight Budgets?
Apr 26, 2023
This week we released our quarterly Freight Market Update which addresses what’s going on with different modes and the economy. Let me cut right to the chase: It’s not a pretty picture.
As you can see from reading the report, we include a lot of facts and figures from sources throughout the industry. And these facts paint the picture that we are, in the words of J.B. Hunt’s President Shelley Simpson, in a freight recession.
In a recent call with the financial analysts, Shelley pointed out that these are challenging times for carriers. In short, the carriers are experiencing inflationary costs while at the same time, seeing decreasing revenues. Like I said, it is not a pretty picture.
After significant rate adjustments in 2021 and 2022, a lot of shippers are looking at this as an opportunity to conduct sourcing events and make sure they're getting the best rates possible in this market.
And this makes sense based on the fact that truckload rates are in some lanes running at 15% to 25% lower than they were one year ago. We've also continued to see much lower ocean rates which are in some instances at pre-pandemic levels. In the LTL market, we are seeing a bit of a different picture. In some instances, the rates have tended to stay more stable overall as carriers look for the best ways to balance their network. But there are situations where the right sourcing strategy has resulted in significantly lower LTL rates. And on the parcel front, UPS and FedEx have managed to keep increasing rates even in this environment.
Add it all up and there may be a great opportunity to lock in lower rates. But that all depends on your sourcing strategy. Having conducted billions of dollars in sourcing events, we have a wealth of experience and expertise we’d love to share with you. So if you are interested in getting in touch, and learning more about how your company can lock in these savings in the midst of a freight recession, you can schedule time with us directly on Calendly.
Whether you have questions about the planning process or anything else, we’re on your team and we are here to help.