What points drive decision-making in freight
Deciphering freight data can be a daunting task and understanding the application of data points is tricky. This episode of Freightonomics is dedicated to making sense of the numbers and the story they tell about the current state of the market.
Anthony Smith and Zach Strickland start off their discussion by talking rate increases from maritime carriers and LTL businesses like Forward Air. Strickland says rate increases are cyclical for LTL carriers so it should be no surprise when rates go up 2-3% per year.
Smith says one of the key things to understand when looking at freight data is that there is a lag from one data point to the next. When it comes to rate increases, the timing is pretty much correct as companies have hit their fourth-quarter budgets already.
Tender rejections in the Northeast have risen a little bit after the region was slammed with a massive winter storm. Strickland says this is an interesting thing to see since the storm is off the coast, but it means “the carriers’ freight networks have been impacted.”
Strickland compares movement of market indexes to a traffic jam, saying that unwinding the tightness and capacity issues will take a long time. The entire supply chain is struggling to function efficiently, and Strickland thinks there will be a “wave-like pattern” as more obstacles emerge or disappear.
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