Stifel wrap-up of Northwestern transportation summit also focuses on how e-commerce infrastructure could help last-mile trucking companies.
Freight brokers and trucking companies are enjoying a favorable pricing environment due to tight capacity in the market, according to the investment bank Stifel’s notes from the Northwestern University Transportation Summit Nov. 14.
“Tight capacity has created a favorable pricing environment for freight brokers and truckers,” the Stifel transportation and logistics research group said. “Exclusively using driver pay as the lever to add back capacity seems unrealistic, as retailers are beginning to balk at the rate increases above and beyond what they’ve conceded over the last year.”
The conference also focused on technology’s growing role in the domestic transportation landscape.
“Those who can leverage technology and operational efficiency to increase capacity are well positioned to gain a strategic advantage moving forward,” the Stifel note said. “Those with premier, continuously improving systems are best positioned to successfully drive further industry consolidation.”
Meanwhile, companies that focus on niche elements of evolving supply chains stand to benefit from infrastructure built around e-commerce.
“Many truckers advocate more effective load/unload operations at retailers’ distribution centers, as they look to improve productivity of scarce driver resources and ever more expensive power units,” the note said. “Last mile and expedited players may benefit from an evolving distribution center network that is increasingly supporting e-commerce, rather than traditional retail (transacting within the context of a brick/mortar store).”
The summit also highlighted the bump the industry will likely receive from continued near-sourcing.
“Freight transportation will benefit from a continuation of the current trend of near-shoring and insourcing,” the note said. “Products with high cube up factors will be the first to be near-shored and/or in-sourced.”
Finally, the note touched on whether congestion at U.S. West Coast ports might drive cargo to intermodal via Mexico.
“As port congestion becomes a larger issue in American freight flows, it is a possible tailwind for intermodal volumes routing out of Mexico,” the note said. “The world’s largest containerships (18,000 TEUs and up) can’t fit through the Panama Canal (even once the new larger locks are operational) and could end up at Lázaro Cárdenas, Mexico (rather than routing through the Suez Canal).”
Tight capacity producing favorable pricing environment for truckers, brokers
