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Freight pricing continues to change across the globe. According to Darren Dodson of Material Handling & Logistics, the state of e-commerce will drive the majority of freight rate changes as more than 8.6 billion packages will make their way to U.S. customers in 2020. Traditional demands of the supply chain market, including increased visibility, better efficiency, and faster service, will also force the freight pricing 2020 trends into an upswing. However, the recent events surrounding the coronavirus and potential disruption to the supply chain will serve as a check to keep carriers competitive and help shippers maintain freight spend control. Let’s look at the risks that affect freight pricing 2020 trends, what they may mean, and shippers can stay proactive.
Global freight pricing 2020 trends indicate upcoming volatility in the market will continue. Although the United States is on the verge of a trade deal with China, uncertainty remains. Even assuming a trade deal is agreed to by both parties, it must still endure the grueling process of ratification by Congress. With 2020 being an election year, such ratification needs will likely further polarize the country. Moreover, the changing landscape of consumer demands will force supply chain leaders to rethink basic strategies and logistics ventures to combat the costs and effects of e-commerce. And, SKU proliferation will only continue still. Not all the risks can be listed in a single article, so supply chain leaders must start thinking about radically evolving their technology to meet the changing landscape and add value.
As explained by Mike Short via Logistics Viewpoints:
“Significant investment in technology and transportation platforms continue to accelerate across the industry. Beyond private equity groups, well-respected and established providers like C.H. Robinson are making investments that will reshape logistics. These growing technological investments will continue to create value across the supply chain.
While this opens new options for shippers and carriers alike, you may likely need to spend more time researching which technology option is the best fit for your own organization. After all, the right technology offers tailored, market-leading solutions that work for supply chain professionals and drive supply chain outcomes.”
Freight pricing in 2020 will involve a return to data-based decision making and the need for a careful balance between both contracted and spot freight rates. These trends include:
Now, on to the impact and mitigation strategies shippers can leverage to keep freight spend under control.
The freight pricing 2020 trends in the market will see an overall rollercoaster of rates. Spot rates will ebb and flow in response to coronavirus. LTL freight rates may decline as shippers look to tap the value of FT, but they will rebound as more shippers look to use consolidation strategies. It is an endless path of change, and with the right technology and strategy, your organization can and will stay competitive.
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