The 2:00 Minute Warning

This Friday marks the 41st anniversary of when TranzAct opened its doors for business. We’ve been watching the freight markets for decades and sharing this weekly Two Minute Warning for about 16 years now. Over the years one thing that’s stayed the same is that the logistics industry is constantly changing.

Here’s a look at some of the changes we’re watching today.

In the truckload market, a rebound in 2025 could have a significant impact on overall freight costs. That’s why last week I was delighted to hear about this topic at Ben Gordon’s supply chain conference in West Palm Beach. A message that came from panel discussions is that truckload carriers are cautiously optimistic about 2025, not so much because demand has picked up but because supply has diminished as carriers have closed their doors. Several of the carrier CEOs I visited with highlighted the fact that contract rates are almost back to where they were in 2019. But given the increases in operating costs for truckers since 1989, an increase in rates in sorely needed. Given where the market is at, we are recommending that your contracts with the TL carriers be at least twelve months, or twenty-four months if you can negotiate an acceptable escalation clause.

Another change on our radar is what’s going on with UPS and their SurePost program. In the wake of the U.S. Postal Service’s cancellation of their contract January 1, 2025 UPS has basically been responsible for delivering envelopes and small packages to residential areas - and they're not thrilled! That’s why they’ve been putting through 20-30% increases in the SurePost program. Expect more changes to this program to come.

Onto one of the top items we’re watching: what’s going on in the LTL markets. The NMFC changes that we’ve talked about for the last three weeks and that we shared in our recent LTL webinar are only the beginning.

At the conference last week, I talked with several carrier CEOs from LTL companies and they agreed, as we’ve been saying, that these are the most significant changes that have occurred in the LTL industry since deregulation. If you don’t prepare, you could be in for unwanted surprises!

Where do you start? One option is to take part in an LTL assessment to look for ways to reduce your LTL costs. Even when rates are rising, there can be ways to reduce costs overall. With the NMFC changes ahead, it will be important to make sure that the freight you're charging your customers reflects the freight that you’re incurring so that you don’t have negative variances. There's a lot more to cover, so I encourage you to send me a note or schedule a time to meet so that I can help you get started.

BY MIKE REGAN, CO-FOUNDER OF TRANZACT

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