While it's not unusual to hear that freight costs are rising, the magnitude is now catching more attention. Last week, The Wall Street Journal published an article with a headline that gets right to the point: “The Cost of Transporting Pretty Much Everything Just Won’t Stop Going Up.”
The increases are widespread affecting truckload, LTL, parcel, intermodal, ocean and other logistics costs. According to the article, diesel prices have risen 77% over the past year, which impacts each mode.
There’s more to the story than fuel prices though. Shippers are dealing with several pressures at the same time: tighter trucking capacity, higher carrier operating costs, geopolitical disruptions, tariffs and changing trade flows.
The next step isn’t simply to budget for higher rates, it’s to prepare for greater uncertainty. We’ve been emphasizing the importance of scenario planning and TranzAct’s Co-Founder Mike Regan will be speaking on this topic alongside MIT Professor Yossi Sheffi at the CSCMP Edge Conference in Nashville next week.
While you can’t predict the future, you can prepare for different outcomes. If you’re looking for help with this, get in touch.