


Should Contracted Carriers Now Be in The Hot Seat?
Heading into the end of the year usually means an uptick in carrier demand as the fourth quarter is generally the busiest time of year for most shippers. But this year, we are seeing a different picture caused by inflation and stockpiling of goods. Stockpiling & Inflation To be proactive, many merchants overstocked goods early to avoid the supply chain issues from a year ago. As we all know, last year, supply chain disruptions resulted in empty shelves, and Holiday demand that could not be fulfilled in time for Christmas morning. Retailers, manufacturers, and distributors opted to ship and hold Holiday inventory much earlier this year. So instead of huge Holiday shipments hitting the ports all at once, shipments staggered in. But that’s not the only factor. As inflation continues to make waves, analysts have agreed that consumers will purchase fewer gifts in 2022. In fact, they are predicting 9 gifts compared to 16 gifts from last year. Lower inventory that needs to be imported, combined with lower customer spending creates the perfect storm for a fourth-quarter plunge in freight capacity demand. Contracted Carrier Pricing The fourth quarter is typically the busiest time of year for shippers because of all the holiday traffic. Usually, brokers and the spot market make out like bandits this time of year, as carrier demand outweighs carrier supply. But with fewer shipments, many shippers are relying on contracted carriers to move goods. So, the key question for ALL shippers should be… “Are my contracted rates this Holiday season, aligned with true market cost”? As spot rates continue to decline, and shippers rely more on contracted...
How a Rail Strike Impacts Trucking
The threat of a rail strike has ramped up in recent weeks, even causing the United States government to start discussing contingency plans. Supply chain woes are nothing new to the trucking industry over the past few years, but this would put a heavy strain on over-the-road supply. Roughly 60,000 union members that are employed by the railroad are set to go on strike, and that includes conductors and engineers. The railroad system carries nearly 30 percent of the nation’s freight, and a strike by those conductors and engineers would quickly bring the system to a stop. Trucking Routes Would Become Imbalanced The rail industry doesn’t employ nearly as many people as it did decades ago, but railroads are still a vital part of the shipping industry in this country. Railroads move more than 324,000 containers per week. A railroad strike would have a direct impact on truckload capacity, causing it to be oversold and imbalanced. Trains are how goods get from ports to the distribution hubs. Trains are built to move massive quantities of things like grains, chemicals, and coal. One railroad car has the capacity of between 3-5 semi-trucks. A rail strike would produce an additional 200,000 tanker truckloads per week – just to move chemical products. Find Ways to Expand Trucking Capacity Now If trucks need to shore up the loss of rail shipping options, it would put even more strain on the ports – many of which are already bursting at the seams. The threat of a rail strike is real, and businesses that rely on shipping should be doing everything in their power to prepare...