My wife took my boys to get suits this week and had to go to 3 different stores before she could find an employee at the store to help. The previous two said no one was working and they simply cannot fill positions.
We can't shut the world down and give out boatloads of free money to everyone and expect to get back to anything close to normal for a while.
FedEx Freight, as I'm sure you all know, took the unprecedented step of flat out cutting off 1,400 shippers due to having too much volume. Other carriers are following right now - maybe not cutting off shippers entirely, but we are hearing they will stop accepting certain freight at certain times - overlength items, volume shipments, shipments to/from congested areas, etc, etc.
Quite simply put - all of the above adds up to a distressed industry where there is no "solution" other than time - and I wouldn't expect things to clear up for another year at least. So this challenge will be with us for a long time.
The article below out of the Journal of Commerce discusses much of this with better detail and well worth the read. Pay attention to the last paragraph.
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Cass just released their monthly transportation indexes and it's always an interesting read so I'll let them speak this update with a link to their report for May, 2021.
I find the last line interesting - "
With enough time, we believe the cure for high prices is high prices." Meaning - don't expect freight rates to go down. The "new normal" is all about looking inwards to find freight savings (planning, optimization, etc).
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Today's focus is on what we're seeing in longer-term pricing trends for LTL and TL.
For LTL pricing, we look to the Feds LTL PPI for long-term guidance and the signal here (shouldn't be a surprise) is that LTL pricing is starting a new leg up. Carriers have had pricing power for some time now, but TL is always faster to respond vs. LTL. Currently, we are hearing that many LTL carriers are looking for double-digit increases, cutting unprofitable business, and not even considering new RFP's (unless you're a preferred partner like Recon is ).
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Freight Update
After a very rough 1st Quarter to start off 2021 in the LTL realm due to extreme weather scenarios, coupled with the already tight capacity issues due to Covid 19 – things seemed to settle down somewhat in April. However, since then Recon has seen many carriers halting service and executing embargoes in various lanes in May again.
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TRANSPARENCY! Going to deviate a bit today from the same tired news that capacity is tight, rates are running wild, and service is bad. Brandon Lay - Yada, Yada, Yada. But please read thru.
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How many Amazon or FedEx, UPS, USPS packages have you received at your door in the last 6 months or so? Not sure about you, but I'm thinking it's more than the sum of all packages you've received in your life prior to 6-8 months ago. Unless, of course, you've been a professional online shopper for many years now. And have you seen a new Amazon DC near you lately? Probably.
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"Don't you ever have any good news??". A few folks have asked me that lately and the good news is YES! Spring is in the air, the Masters is on, and my baseball season starts tomorrow. So there!
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It's hard to keep saying over and over again "The sky is falling"! We try and search for the light at the end of the tunnel but it seems they keep extending the length of the tunnel. At this point, we'd have to conclude we will be in a rising rate environment with very tight TL carrier capacity and sub-standard LTL carrier performance thru the end of 2021.
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Freight News,
Freight Update
In an article published by Freightwaves this week, Todd Maiden of Freightwaves, interviewed Recon's own Curtis Garrett (VP Pricing and Carrier Relations). Curtis sheds some light on the volatile LTL market including suggestions on how LTL carriers can improve their service. It's a good read for those deeply involved in LTL shipping as well as those concerned about the chaos in the industry today.
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TMS,
Freight Insurance,
Freight Claims,
Freight News,
Freight Update
Pretty simple message here and I'll let Zach Strickland describe it below in his own words for FreightWaves.
The basic principle is when the going gets tough, contract carriers may get going. They reject contract rates to move to the spot market and when spot rates move down they are more than happy to handle the contract rates they rejected previously.
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Freight Technology,
TMS,
Freight Insurance,
Freight Claims,
Freight News,
Freight Update
