In the previous decade, the volatility of LTL rates was often described as having the same temperament as a Magic 8 Ball. On any given day, the news about fuel rates could be “It is decidedly so,” whether the news was positive or negative. Now, we just take comfort in the consistency that no matter what we ask, no matter how hard we shake, the only answer we get is “Outlook not so good.”
All games aside, even though LTL capacity is expected to grow by one or two percent, demand is expected to outpace the supply, growing at 3%. Boosted by the import boom and undeterred by the recent drop in FTL prices, LTL rates should be insulated from market instability and fluctuations that could be on the horizon for other modalities.
Despite speculation that more shipments will be combined into full trucks to minimize the impact of rising fuel rates, demand hasn’t waned. Part of that problem arises from fewer full loads going to one distribution center and more small loads going to multiple distribution centers in a smaller area. This practice will keep LTL rates high and capacity low as we move through the summer. Combining that with rising fuel costs and any labor shortages from pandemic outbreaks, we’re expecting to work extra hard through the third quarter to mitigate the problems that will arise in the LTL space as we procure services for our clients. Unfortunately, the disruption that can spur rates to dramatically swing up and down has fallen off and now we’re battling a “more of the same” climbing rate and falling capacity situation.
As interconnectivity grows between carriers and customers, technology advancement allows for swifter data transfers and information communications to take the place of physical data transfers and the time wasted in set up. With the industry on the cutting edge of digital and paperless advances, security and efficiency are growing exponentially. LTL providers are now able to increase the service offerings and options we can provide to customers to move above and beyond the competition.
With RS Express, your cargo is being driven by experts who understand the cargo journey through the supply chain with strategic precision and an eye for efficiency and excellence. With our team in your corner, your logistics needs are handled by dedicated and passionate professionals in a worldwide network of service-oriented and proactive operators.