The state of freight shipping in 2019.
January 24, 2019
2018 is now behind us, and the freight industry is already picking up the pace for what lies ahead. To effectively plan for the rest of the year, shippers must understand the current state of freight shipping and the trends impacting it.
Over the last year, capacity tightened and rates fluctuated in nearly every sector. As we move through 2019, it’s important to develop a strategy to work around these obstacles and the trends to come. Before you do, however, it’s critical to gain a complete understanding of what the upcoming months will bring.
Let’s take a closer look at some of the freight shipping trends we expect to see in 2019.
E-commerce will bring LTL to new heights.
E-commerce dominated 2018, leading to an increase in LTL demand and last-mile delivery. This trend is expected to once again impact the freight shipping industry throughout 2019. For supply chains to keep up with the fast pace of e-commerce, they must secure warehouse space close to customers, provide quick delivery options and find a way to cut costs.
In addition to the e-commerce boom, the LTL industry benefited from a focus on smaller and lighter loads, as well as truckload overflow resulting from tight capacity. Full truckload carriers, in particular, often had to turn away freight while operating in this year’s capacity crunch. As a result, overflow shipments were commonly split into LTL shipments or re-marked as an LTL shipment entirely.
An influx of fulfillment centers and warehouses.
In 2018, traditional LTL shipments turned out to be the approximate size for small urban fulfillment centers. These centers are strategically located in densely populated areas and require smaller shipments to accommodate for the various SKUs stocked to please customers.
In 2019, more fulfillment centers are expected to emerge to help retailers fill orders and quickly get them out to large volumes of customers. This will allow carriers to offer a shorter delivery window and more same-day delivery options.
The e-commerce boom shook things up last year, but you can plan to use these trends in LTL and last-mile delivery to your advantage for the rest of 2019.
Truckload carriers expected to prosper.
2019 looks to be a promising year for full truckload carriers. In the truckload sector, demand is projected to grow at a much slower pace in 2019 against a market of small carrier capacity that most analysts believe expanded in 2018. Over this past October, the for-hire truck tonnage index increased 9.5 percent, displaying a sudden surge in freight.
As we start up a new year, analysts suggest contract pricing is forecasted to expand, but to a lesser extent than 2018.
Supply and demand seek stability.
In 2018, we saw some significant fluctuations in supply and demand in various areas of the freight industry. During the week of Thanksgiving, DAT Solutions data showed van rates increased on nearly every major lane in the country. Rates rose an average of 2.3 percent on 100 of the highest-volume van lanes.
Over the summer, the flatbed load-to-truck ratio fell by 36 percent after hitting a record high in the first half of the year. This ratio has reached normalization since in the new year. In 2019, third-party logistics companies are expected to allow data analytics to play a greater role in predicting demand and optimizing capacity for their shippers. This eases the planning process and helps prepare for potential roadblocks or delays when shipping.
As we make our way through the year, you can refer to these trends to help anticipate the obstacles or opportunities to come. Understanding past freight shipping trends is the key to a successful future. If you would like to learn more about freight shipping in 2019, contact us today to speak with a freight expert.
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