Truckload Services: The Market Turn
Now that it is early 2023, warehouse inventory levels are back up to pre-pandemic levels and above, creating less demand for spot market truckload services. Shippers who had to pay exorbitant costs to move their excess freight are evaluating their asset carriers and truckload brokers to see who provided the most reliable capacity at the best price during the heightened market. Shippers should also be sure those contracted carriers stuck to their pre-negotiated shipment numbers, as some trucks may have left the contract market, even if only for a few high-paying spot loads.
Several newer asset carriers that entered the market during the boom cycle are slowly hanging up their trucking hats now that linehaul rates may not pay enough to turn a fair margin and cover costs. However, not all carriers providing truckload services are throwing in the towel. Market trends show capacity is still excessive, keeping rates on the spot market low. Until additional capacity exits the market or volumes increase, it’s imperative that carriers, especially the smaller ones, keep the wheels turning.
Smaller truckload carriers must continue to keep their operations running if they hope to survive and thrive in this environment. They need to find new ways to generate revenue and diversify their business operations or avoid being dragged under by the weight of the big players.
The Shipper / 3PL Provider Connection
Shippers and freight forwarders must consider various options when choosing a carrier for their truckload services, including cost-effective long-term contract options and short-term use of special trucks or trailers. This flexibility can help small carriers adapt to changing market conditions and continue providing reliable services.
As a third-party logistics provider, we provide flexible solutions for all your transportation needs, from shipping goods across the country to transport materials from one facility to another. Plus, we work with many carriers to find the right fit for you.
If you are evaluating your current third-party logistics providers or need market capacity, look no further! We have the perfect team of specialists to assist you with all your shipping needs. We offer a wide range of services, including freight forwarding, consolidation, and international transportation. Our dedicated team of professionals provides high-quality service to our clients. They have experience in various fields, such as logistics, transportation, and supply chain management. With our team’s expertise and knowledge, you can be assured that you are getting the best possible value for your money. So why not give us a try? We are confident that you’ll be glad you did!
If you are ready to take your business to the next level and want a reliable partner for your truckload services that will help you get there, feel free to reach out. We promise to do our best to ensure your freight moves safely, efficiently, and cost-effectively. Do you have a load ready to go? Get a rate right now!
The Supply Chain Backstory
When COVID struck the U.S. in early 2020, the focus of the American dollar went from service/hospitality/travel directly to consumer goods. Instead of booking airline tickets to their favorite destination, people spent that money on home improvement projects or exercise equipment they could set up at home. In the late spring/early summer of 2020, retailers had deficient merchandise levels to meet this consumer demand. That trend stayed consistent until inventories slowly climbed back up around late 2021/early 2022.
So, what did that mean for the supply chain industry? Shippers’ need for additional transportation capacity shot up quickly, but the contracted trucking companies moving goods for those shippers could not supply enough truckload services to meet the demand. That meant those excess or overflow shipments were booked on the truckload spot market, usually through a third-party logistics provider or intermediary. Demand in that spot market skyrocketed, which sent prices soaring to historical levels and offered new asset carriers an appealing offer of quick money to join in and grab a slice of the pie. The lack of capacity in the market drove prices to unprecedented levels until the spring/summer of 2022, when consumers, once again, started spending money on hospitality or started to cut back spending to brace themselves for upcoming inflation.
A Note to Carriers
If you are a carrier looking for freight at a fair price, please reach out to us. We rely on partnerships with quality truckload carriers (like you!) to keep the flow of goods moving, and we would love to speak with you. Email us today at FLI-FTLBids@fliinc.net