Make sure your 2020 Freight Budget addresses the difference between truckload and LTL pricing patterns
Sep 18, 2019
Wondering how you can build a great freight budget in 2020?
Lately we've been inundated with questions about what's happening in the freight marketplace. The most common questions revolve around the differences between what is happening with truckload pricing versus pricing in the LTL sector. Specifically, shippers are seeing truckload carriers offering lower rates, while LTL carriers are moving in the opposite direction.
Why is this happening?
In this week’s video, I offer some answers. Additionally for a thorough explanation as to what's happening in the truckload sector, listen to last week's webinar with several trucking executives including Derek Leathers, CEO of Werner, Jeff Rogers, CEO of Universal Logistics and Tom Albrecht, Chief Commercial Officer of Celadon, as they talk about what you can expect in 2020.
You may also want to look at some thoughts I shared in last week's article in Logistics Management: “What a difference a year makes in trucking”.
One of the things this article highlights is the volatility in "rate spikes." As Derek Leathers shared on our webinar, what has been different in the past year is how quickly the market changed. The article details the current trucking climate and what's brought us here—it is a must read!
But for those of you working on budgets, I know you're most concerned with what's ahead. So let’s cut to the chase….
Our prediction that I share in this week’s video is that in 2020 your truckload rates should be relatively flat, but LTL rates will be up 3-6%. Why? While the truckload market will continue to deal with higher capacity and lower demand, most LTL carriers are getting more sophisticated in analyzing their data and making decisions around utilization rather than taking anything that comes their way.
As we have addressed in previous Two Minute Warnings and scores of interviews with senior executives from trucking companies, there are things you can do to mitigate increases. If you’d like to learn more about what these things are or if you’re concerned about whether you’ve got the best LTL rates possible, simply give us a call.
Do you have the best LTL rates? If you’re not sure, take a moment to benchmark your rates.