November 10, 2022
End of 2022 Shipping Expectations
As the year begins to wind down, here are my end of 2022 shipping expectations. These are predictions, so obviously things can change, but hopefully it gives you a good idea of what to expect:
From here to the end of 2022 I expect:
- Truckload demand to continue to drop off resulting in better line-haul pricing on the spot market. But, the looming diesel fuel shortage largely driven by fallout from the war in Ukraine may offset it.
- LTL demand to continue to moderate, although not as much as in truckload markets. LTL carriers will retain pricing power into 2023 when I think we will see rates hold or soften. The overwhelming trend in LTL pricing will be a story of data and not demand/capacity as large carriers are becoming more and more adept at measuring, costing and consequently pricing freight on a piece-by-piece basis. This represents opportunity for shippers willing (and able) to make their freight more attractive…and an area we are spending a lot of time developing strategies.
- Ocean shipping demand has seen the bottom drop out and prices have adjusted accordingly. Because of the lead/lag times involved in ocean shipping this may be the first of the freight modes to see true post-covid normalization. Unless there is a port strike…
- Rail shipping, which was already tight is booming even more right now as coal sees a resurgence. The energy market disruptions from the war in Ukraine have driven skyrocketing demand for US coal and that moves domestically almost exclusively by rail. So rail prices remain high and capacity tight as railroads would rather move bulk coal than other commodities for profit reasons. There is reason for continued optimism that the rail worker strike may yet be averted. But it’s dicey. So far, two of the 12 unions have already rejected the proposed settlement brokered by the White House.
These are my End of 2022 shipping expectations, but Whatever happens, Customodal is here to help.