Trucking freight rates are expected to see an increase leading into the holiday months. With the freight industry struggling in 2019, it comes as no surprise that there will be a change for customers.
The trucking industry has been declining in 2019. In the first half of 2019, 640 trucking companies went out of business. The lack of drivers has given freight companies headaches and the need to increase pricing.
In 2018, truckload shippers’ rates jumped to historic highs. Which was why at the beginning of 2019 rates remained lower. The widely increased capacity that was initially available this year. There will be an increase in rates but not a sharp spike as previous years. There will be more available trucks to handle the influx of holiday shipments.
The truckload industry was seeing some signs of improvement before Labor Day weekend. There was an increase of freight volume once news of Hurricane Dorian hit, as shippers were trying to get ahead of the storm. However, it is not substantial enough for an upswing in the trucking industry.
Imports and exports have been fluctuating so trucking companies have been having a hard time anticipating how much tonnage will move on American highways.
The truck rates increase also brings an additional problem to companies. As the shipping rates rise, do you eat the costs or increase the product prices? The problem lies in that with the continuous increase, companies are unable to take the repercussions of the situation.
One way to help aid in the shipping costs is to look into LTL shipping (less than truckload) instead of FTL (full truckload). LTL does minimize the costs when the load is more than 150lbs but does not require a full truckload. Too much for a parcel carrier service but not enough for a full truck. Shipments from multiple companies are then combined in one truck. Each shipper only pays for the weight of the freight and the space it uses in the trailer. Trucking companies with smaller fleets will not affect you as much when using LTL shipping.
If you have some flexibility in shipping arrival dates, another way to decrease shipping costs is to ship on off-peak days. For non-consumer products,88 Fridays and Mondays are great shipping options. Consumer product shippers want products to be on the shelves for the weekend, making Thursday a high-volume day. Thus, a more expensive day.
LTL shipping is easy to track. The shipments are trackable through Bill of lading number, pro number, PO number, shipment reference number, or pick up date range.
LTL Shipping offers additional services beyond dock to dock. These include liftgates, non-commercial shipping, notification options, inside pickup and delivery. Inquire about the billing on these additional services as it can be billed at a fixed rate or a surcharge based on weight.
Rising insurance costs are weighing on companies. Tariffs may be responsible for the decreased freight demand. 2020 may also be very similar in challenges for shippers; however, it is still too early to forecast next year. While the rates are expected to increase slightly for the holiday season, it may only be speculation.