With capacity constraints at the beginning of the year on the heels of a global pandemic, challenges from the first half of 2021 should continue into the second half of the year, according to the latest transportation industry forecast produced by Transportation Insight and a subsequent roundtable panel of transportation experts. Transportation Insight examines trends and provides multi-modal transportation and logistics management insight across full truckload, less-than-load (LTL), small parcel, international and brokerage environments every quarter.
Transportation Insight’s small parcel experts predict parcel challenges will persist in the third quarter. Capacity constraints will become more pronounced ahead of the holiday peak. UPS and FedEx Ground divisions will limit capacity to maintain service levels and remain profitable. Brian Broadhurst, Transportation Insight Vice President of Parcel SMB Solutions, suggests diversifying carriers and exploring less traditional options on a regional basis.
The company’s forecast for less-than-truckload (LTL) predicts a continued capacity crunch. Transportation Insight Vice President of Pricing Services Chris Mendenhall says, “Conditions are unlike anything the market has experienced. Many major carriers are not accepting new business. Fuel surcharge averages are trending upward to 22%.” He cautions, “Expect some carriers to pursue out-of-cycle annual business reviews and implement rate increases.”
The truckload sector faces a variety of capacity issues and rate increases, according to Transportation Insight’s forecast. James Mathews, Transportation Insight Senior Director of Truckload Procurement, says, “All indicators point toward a full truckload environment with tighter capacity and elevated truckload contractual and spot rates continuing to third quarter.” The forecast reveals that astronomical spot rates—already up 61% on average across all equipment types—will rise even higher. Mathews adds, “Truck and driver shortages make the situation even more complicated.”
On an international level, Transportation Insight forecasts that ocean shipping disruption will continue through peak season. The company’s experts indicate that shipping costs, which are at historically high levels, are going to increase in a substantial way over the quarter. Demand for air freight is on the rise, driving up costs as capacity issues build. The Transportation Insight forecast notes that port congestion on the U.S. West Coast is slowly improving.
Each mode-by-mode section of the Transportation Insight 2021 third quarter forecast includes actionable advice to help shippers stay on course despite the many looming challenges. Serving customers in this environment depends on a consistent visibility to transportation activities and costs. The experts at Transportation Insight say moving freight requires strong partnerships with reliable providers, contingency plans – and patience. Controlling costs relies on ongoing analysis of strategy, compliance and performance, as well as agile course correction supported by experts.
