The freight shipping market is a reactive industry. Freight carriers can’t create demand, they just react to it. When the economy is as strong as it was in 2018, demand is high, capacity is low and rates rise. In addition to a strong economy, 2018 was notable for introducing Electronic Logging Devices (ELDs). The creation reduced capacity and the shortage of new heavy-duty freight trucks.
The Freight Shipping Market of 2019
2019 is a bit of a different story, as is often the case following a boom year.
- Truck manufacturers built more Class 8 trucks than the market could absorb
- Manufacturing is down, so shipping of manufactured products has declined
- Exports of agricultural goods have declined, along with the shipping of those products
Freight Shipping Market Volatility and Confusion Reign
The result of these three market forces is a very confusing freight shipping market.
More trucks mean increased capacity and a lowering of demand. This led to a slight lowering of spot rates for truckload shipping. Even while carrying more volume than ever.
Some carriers thought the good times would last forever and took on too much debt to buy new trucks, more than they needed in some cases. They weren’t ready for the worst when rates fell. Not able to handle their debt and was run out of business.
Meanwhile, DAT Market Analyst predicts that spot rates will be on the rise in the second half of 2019. This will average somewhere between 2017 rates and the peak rates of 2018. They may be right, but with market conditions like this, what will happen next is hard to predict.
What’s A Shipper to Do?
When facing an uncertain freight-shipping future, the best thing a shipper can do is rely on a 3PL. With plenty of experience and extensive LTL and Truckload, shipping carrier networks use FreightCenter.
Relax, We’ve Got Your Shipping Covered
With our extensive, fully vetted carriers, we’ve got your shipping covered. Most FreightCenter customers probably didn’t even know that the freight-shipping market was going through such a turbulent time, because we always make shipping easy and affordable. So, if you’re already a FreightCenter customer, feel free to pat yourself on the back (high-fiving yourself might be easier) for choosing a stable leader in a sometimes-volatile industry.
If you aren’t a FreightCenter customer yet, this is the perfect time to see how we can help your business ship more efficiently. Start with us by getting a free freight quote or talk with one of our National Account Managers (shipping experts) at 800.716.7608.
