Trucking rates have nowhere to go but up, and they’re ready now, several speakers told freight shippers Tuesday at NASSTRAC's annual conference.
"Price increases will be coming, and they may be coming sooner rather than later," said Chad Thomas, director of intermodal at J.B. Hunt Transport Services.
He was talking about truckload rates, but other speakers at the conference in Orlando, Fla., said the same holds true for less-than-truckload pricing.
"From a shipper's perspective, rates are going to go up," said Jon A. Langenfeld, transportation analyst and associate director of research at R.W. Baird & Co.
In truckload, "Rates are going to move higher if for no other reason than the age of the capacity base out there," he said, noting that many older trucks are being retired.
"The age of the fleet today is as low as it's been in a generation, and that means there's not a lot of capacity out there for when demand increases."
Truckload carriers have reduced capacity about 14 to 18 percent, and LTL carriers about 8 to 12 percent, according to estimates presented at the conference.
"In truckload pricing, the pendulum has swung, and if you haven't talked to your carriers yet, get out there and do it before they come to you," Langenfeld said.
On the LTL side, "it's going to take longer, but the trend is definitely up." Shippers are bracing for rate hikes while looking for ways to lower costs.
"I see a lot of trouble explaining to our management why we need all these rate increases," said Candace Holowicki, manager of logistics at Masco Corp.
"I'm trying to be an advocate for both sides of this, but I can't give everyone a 20 percent increase, so don't ask -- the money's not there," she said.
"We are very willing to sit down and address what we can do to cut costs for both parties," Holowicki said, "but we can't just slap money on the problem."
Rate increases aren't necessarily a bad thing for shippers, Langenfeld pointed out.
"If you want a credible supply chain, a precision network, you want your carriers to be healthy," he said. "Right now, they're not."
"Price increases will be coming, and they may be coming sooner rather than later," said Chad Thomas, director of intermodal at J.B. Hunt Transport Services.
He was talking about truckload rates, but other speakers at the conference in Orlando, Fla., said the same holds true for less-than-truckload pricing.
"From a shipper's perspective, rates are going to go up," said Jon A. Langenfeld, transportation analyst and associate director of research at R.W. Baird & Co.
In truckload, "Rates are going to move higher if for no other reason than the age of the capacity base out there," he said, noting that many older trucks are being retired.
"The age of the fleet today is as low as it's been in a generation, and that means there's not a lot of capacity out there for when demand increases."
Truckload carriers have reduced capacity about 14 to 18 percent, and LTL carriers about 8 to 12 percent, according to estimates presented at the conference.
"In truckload pricing, the pendulum has swung, and if you haven't talked to your carriers yet, get out there and do it before they come to you," Langenfeld said.
On the LTL side, "it's going to take longer, but the trend is definitely up." Shippers are bracing for rate hikes while looking for ways to lower costs.
"I see a lot of trouble explaining to our management why we need all these rate increases," said Candace Holowicki, manager of logistics at Masco Corp.
"I'm trying to be an advocate for both sides of this, but I can't give everyone a 20 percent increase, so don't ask -- the money's not there," she said.
"We are very willing to sit down and address what we can do to cut costs for both parties," Holowicki said, "but we can't just slap money on the problem."
Rate increases aren't necessarily a bad thing for shippers, Langenfeld pointed out.
"If you want a credible supply chain, a precision network, you want your carriers to be healthy," he said. "Right now, they're not."
