In 2015, there are two challenges that shippers and 3PLs will deal with as they manage their transportation and supply chain operations. These challenges will directly impact freight pricing structures.
First, shippers will continue to see tight capacity and higher rates in the truckload and less-than-truckload sectors.
Trucking companies are using technology and doing a better job at managing their assets. Couple this fact with good tonnage numbers, and you have a seller’s market for 2015 that will require smart shippers to re-evaluate their negotiating strategies to focus on locking in capacity in their core carrier network at predictable prices. Companies that continue to focus on getting the lowest rates will get “paper rates” — aka low rates that won’t get your freight moved; thus these shippers will be forced to increasingly rely on the spot market where price fluctuations can be significant. Tight capacity will lead to higher rates as carriers look to maximize the yield on each trailer. Expect carriers to be more aggressive in using their pricing power to cull the least profitable freight and replace it with higher yielding shipments with better margins.
Second, LTL carriers will continue to focus on dimensional freight issues in their pricing programs.
With more LTL carriers using “dimensionalizers” and technology that enables them to determine how much space every shipment is taking, the National Motor Freight Classification will become less important. LTL carriers will push for pricing platforms that compensates them for the size (space) and weight of shipments regardless of freight class.
Add it all up and shippers could see TL and LTL freight rates increase 5 to 7 percent or more. The good news is that with lower fuel surcharges, shippers’ actual freight costs may increase by only 2 to 4 percent. However, if diesel prices rebound, all bets are off.
Michael A. Regan, Chief of Relationship Development, Tranzact Technologies