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Monday, March 1, 2021

Heavier Loading Does Not Increase Shipping Rates.

Heavier Loading Does Not Increase Shipping Rates.

The trucking industry is facing an interesting dilemma, significant increases in loads being shipped are not leading to increased shipping rates. A quick look at some of the shipping reports would seem to indicate things are trending positively. For example, imports in Los Angeles and Long Beach are up 26% over last year, loads available on the spot truckload market were up 46% over the prior month and 92% when compared to the same month last year.

So why are prices soft? Why are some of the largest trucking companies in the country reporting decreased earnings or preparing investors for lower than expected profits? The answer is fairly simple. First, the increased tonnage available to ship has not made much of a dent in the nation’s shipping capacity. Furthermore, some of the larger players seem to be attempting to capture additional market share by keeping shipping rates depressed.

So while increased shipping numbers are a cause for cautious optimism, it is still too early to declare an end to the recession of the past few years.