Freight Market 2022
The pandemic brought many changes to the freight market in 2020 and 2021, from labor shortages and supply chain disruptions to wildly fluctuating volumes of goods impacting the system. Practically speaking, the net effect of the various impacts to the freight sector was felt in higher rates, but there are some signs that the market may be beginning to shift in ways that could help shippers in search of relief.
Domestic Freight in 2022
At the beginning of the year, experts forecast that ongoing market turmoil would be likely to keep rates high through most of 2022. Researchers at FTR Transportation Intelligence
indicated that their data showed total truckload rates holding at about 12% higher year over year at that point, and believed they would grow at 2.5% to 3% throughout the remainder of the year. To put those figures in perspective, Cowen Research and AFS Logistics’ freight index report from Q1 anticipated truckload rates per mile to be 28.2% higher than in January 2018 (a benchmark selected because it was a freight market not affected by the COVID-19 pandemic). The same index projected less-than-truckload (LTL) rates to be 35.8% higher than the baseline, but relatively level with Q4 2021.
A number of factors have been contributing to ongoing high freight rates. These include record general rate increases (GTIs) from parcel and LTL carriers, rising fuel prices worldwide due to the war in Ukraine, and continued labor disruptions from successive waves of omicron variants sidelining drivers. At the same time, high inflation, rising interest rates, and decreasing consumer confidence are threatening to slow the economy at large, although unemployment rates remain low. It is anticipated that lower consumer spending and a reduced demand for goods as the U.S. braces for a potential recession may exert a downward pressure on high shipping volumes and rates. Recent declines in fuel prices may also lower rates, but the continued volatility of the geopolitical climate casts doubt on the stability of the current downward trend.
The combination of factors pulling the market in different directions has resulted in some unusual circumstances that can benefit shippers. While LTL rates have remained high, market rates for full truckload (FTL) have become very competitive. In some cases, it has been more economical to send partial shipments via FTL—yes, half-empty trucks—than by LTL.
When prices are high, shippers are motivated to seek out savings wherever they can find them. Strategies for doing so can include diversifying procurement among different vendors, consolidating shipments, optimizing packaging to reduce space requirements, changing the mode of shipment to find the optimal balance of urgency and price, and analyzing expenses to track down sources of waste that can be eliminated. However, one of the most efficient and effective ways of ensuring that you’re staying on top of the best means of saving money on shipping is to work with Clear Lane Freight.
Lower Costs for Small and Medium-Sized Shippers
From our founding, Clear Lane Freight has had a focused mission—providing economical and reliable options for small and medium-sized businesses to move non-time-sensitive goods. We’ve done this by building a nationwide network of regional freight partners, flexibly using LTL and intermodal service to provide reliable pickup and delivery throughout the U.S. As a non-asset-based carrier, we’re free to pursue the best solution available for your shipping needs as the market changes, even if it’s an unexpected alternative.
With FTL rates having come down considerably, Clear Lane Freight is able to help our clients reduce their shipping costs with FTL options in addition to our regular LTL service. In the last few years, we’ve been building partnerships, opening new service routes, and building out our customer service team to stay at the forefront of developments in the shipping industry. This ongoing investment in our capabilities positions us to continue to deliver efficient, competitively priced shipping for our clients whatever the market may bring. To find out more about how Clear Lane can reliably meet your shipping needs with FTL or LTL service, contact us here