Road and Rolling: 2021 Trucking Trends, Holiday Cargo Confusion
2021 Trucking Trends: Purchase Growth, Functional Expansion
At the end of the year, turmoil, record profits and new opportunities for the truck industry are all key themes to consider when forecasting the trends to watch in 2022. The expansion of trucks to LTL space and final miles and the acquisition of regional airlines show that it is strategic to coordinate heavy truck carriers that previously focused on middle mile space. The expansion of intermediaries and investment in technology highlight the challenges facing shippers in this tight capacity environment. Below are some highlights of these trends since 2021.
Purchase of carriers less than truck load:
Increased fleet number and capacity through purchase:
Expansion of mediation:
Trucking Survey: Understanding the Relationship between Shippers and Carriers
Studies published by MIT Freight Lab It suggests that both shippers and carriers behave opportunistically in dynamic market conditions. This is especially true for contract pricing and bid acceptance, where carriers focus on current pricing and load bidding behavior, as well as customer characteristics such as detention time and residence time.
This is important because trucking and logistics are generally regarded as relationship-driven businesses. Carriers and shippers understand that the contract price is negotiated during the bidding cycle in exchange for the quantity, or that the price is respected in the event of a recession or rise in the cargo.
Studies show that these contracted lane relationships are not binding on volume, frequency, or capacity commitments, which are unique aspects of trucking compared to the procurement of other services. If a long-term contract has been signed for the lane, or origin-to-destination pair, the only binding agent in this contract is the price at which the carrier has agreed to move the cargo.
Find the link to Full paper here..
Research highlights:
- Industry data shows that the relationship between shippers and car carriers changes as the market circulates.
- Carriers appear to be short-term focused in response to the shipper’s current market behavior.
- Shippers should prioritize certain harsh market behavior in order to accept bids high.
- Shippers need to set competitive prices against current market prices and bid consistently.
- The destination facility needs to reduce the dwell time in order to receive higher bid acceptance.
Food for thought:
While sales and pricing play a major role in discovering and developing customer relationships, this study found that other factors such as current market pricing, customer facility characteristics, and bid consistency have changed the business cycle. It suggests that it plays a greater role than the idea of reciprocity in the case. This is supported by my experience. Both the shipper and the carrier adjust bid or shipment acceptance behavior based on price and equipment beyond the previously agreed contract fees and quantities.
Market Updates: Weekly changes in the headhole index indicate market instability
With Zach Strickland Freight Waves Daily Watch.
The Headhole Index continues to show that the Atlanta market is more likely to be destabilized due to Christmas holidays. The strong rise in inbound-related outbound bidding demands may indicate that the market may approach a supply shortage situation in the coming weeks. Atlanta is already seeing an increase in outbound rejection rates and is the second largest outbound market in the United States. Other markets of interest that are shown in blue on the map are the Seattle market and the Columbus, Ohio market, where weather remains an issue. , There are numerous large distribution centers. Weekly changes in the headhole index are a good way to identify where capacity conditions may change in the coming days or weeks, as they measure changes in bid balance.
FreightWaves TRAC Lane Spotlight: From Detroit to Chicago
Overview: Van prices will continue to rise once bid denials reach record levels due to limited capacity.
highlight:
- Detroit-to-Chicago outbound bid denials increased by 83.6% from 18 basis points (bps) on December 1st to 33.05 bps on Monday.
- The Freight Waves TRAC spot rate for this lane is $ 3.66 per mile, up 33 cents from mid-December lows.
- Rejection of outbound bids from Chicago to Detroit was 28.31%, indicating tight capacity in both markets.
Carrier: Pay close attention to driver availability figures and take into account drivers who will take extra holidays in early 2022 when booking or accepting customer cargo. If you have room, consider spot cargo first (after making sure that most of the contracted committed lanes are uninterrupted), as the margins will be higher.
Routing Guide: Links from the entire web
modeling Impact of natural disasters US Truck Loading Market (FreightLab)
Werner founder gets FTC penalty Do not disclose stock purchases (FreightWaves)
Chinese Love-hate relationship Its Internet Startup Sector (Information)
Austin’s I-35 has again Worst traffic for Texas truck drivers (FreightWaves)
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