LTL Shipping Rates - Control Costs with a Different Approach
Shippers in the less-than-load (LTL) transportation environment are experiencing historic headwinds. Businesses are bracing for how that will affect their LTL shipping rates. It appears that there’s no short-term end in sight to carrier-favorable market conditions.
Capacity sentiment is trending toward “very tight” for LTL transportation six months from now. Carriers are more disciplined and positioned to “benefit from tight capacity, lack of drivers, new market concentration and mounting COVID-related demands,” according to Logistics Management.
What are you doing to make sure your LTL freight keeps moving tomorrow?
Our expert LTL freight panel featuring Vice President of Processing Services Jay Wilson, Vice President of Client Solutions Paul Schmitz, Partner of Enterprise Solutions Robyn Meyer and Client Solutions Director Melanie Burns will take you behind the LTL carrier curtain and provide guidance that will help you create multi-modal alignment and enable you to access and maintain optimal transportation pricing and service:
Understand LTL carriers’ operational practices and proactive steps you can take to control individual shipment costs and overall transportation spend
Determine and eliminate unnecessary internal costs during pre-execution, post-execution and post-delivery processes.
Leverage analysis and live customer data to understand order performance, determine profitability by SKU, correct network misalignment and determine opportunities to shift into Small Parcel or Full Truckload.
Learn more: https://bitly.gobeon.com/3DdffQg
Excerpt: "Let's take a look at the LTL market and let's actually start with a picture of what our economy has looked like since 2017 up through Q1 of 2021. And we hear GDP often, and that is defined as the market value of goods produced and services provided. And that continues to accelerate beyond Q2 of 2020. In fact, over the last 20 years, 2020 through, or 2000 through 2020, the GDP grew at an average rate of 2%. You can see the stress on the economy and the market through the rapid growth we've experienced through the second half of 2020 into early 2021. It's unprecedented levels that we're facing today. The impact of the growth to the economy and in essence, you know the United States turning itself back on is there's pent up demands for the goods and services and that has accelerated the freight recovery across North America. And it's important to understand why this matters in the subject that we're here to talk about today in regards to LTL freight. The LTL rate growth continues to outpace domestic producers ability to charge for goods and services. Actually in today's marketplace the LTL rate of inflation rivals the parcel sectors rate of inflation that we've seen for the past 10 years plus. And if you look at the chart, you can see that the LTL is growing at 8.8% times faster since January of 2018 where we set the baseline for this slide. So there's a lot of excitement in the marketplace but there's also a lot of things to navigate as we move towards our new normal and what business looks like moving forward. From a shipper's perspective Morgan Stanley recently reached out into the marketplace, got information through Q1 of 2021, but also provided information back from early 2020, looking at the sentiment of the market. And from a capacity expectation, you know, shippers today are expecting that there's gonna be a capacity crunch across our regional and national LTL carriers and they're facing that today. From a capacity issue you also look at the pressure put on rates. You know from a shipper's perspective, going back to 2018 and measuring that against Q1 of 2021, you could see that the expectation and rate increases is as equal to and a little bit higher than what shippers expected in early 2018. And, you know, any time that you see rapid growth turning an economy back on capacity constraints, pricing pressures, typically you'll see a decline in service and shippers today, according to Morgan Stanley and those that they researched, are anticipating a decline in that service."