PLAN AHEAD FOR 2023
MANAGING TRANSPORTATION
OVERVIEW
WHAT TO EXPECT
Spot rates will find a floor in early 2023 as contract rates normalize. Strong routing guide compliance will continue, enabling shippers to apply downward pressure on contract rates throughout 2023. As for the spot market, though severe weather and other disruptions could cause sudden spikes in activity and rates, current conditions will likely continue until a significant reduction in truckload capacity over time upsets equilibrium. Spot rates will find a floor in Q1 or Q2 as they cannot decline much further before operational costs force carriers to pull trucks o the road rather than lose money. –David Spencer, Director of Business Intelligence, Arrive Logistics
The environment for managed logistics looks positive in 2023 as customers seek ways to automate and simplify their supply chains and logistics functions. The pricing environment surrounding LTL has been volatile over the past several years, and shippers are anxious to return to a state of normality. Managed logistics accounts for an increasingly large portion of the LTL industry. As the market slows down and shipping volumes decrease, managed logistics shippers are going to push to reset rates to match today’s shipping costs in a softening economy. Customers will be hyper-focused on utilizing technology to make better use of their data internally or work with an outsourced authority to cleanse their data to drive greater supply chain ef ciencies, including load and transit time optimization, and carrier pro les.
NOTES When considering LTL shipments, keep in mind: 1. Many load boards don’t oer LTL. 2. Some freight auditors can’t audit at the LTL level.
–Adam Blankenship, Chief Commercial Of cer and President of Managed Logistics, BlueGrace Logistics
TREND TO WATCH
In 2023, enterprise shippers will continue to focus on optimizing freight costs—but be a bit more lenient on the method of shipment. Full truckload (FTL) is preferred, but now more shippers are exploring ways to cut costs using LTL. Consolidation is not ideal, especially from an invoicing or reliability perspective, but the cost savings will continue to catch the eye of shippers for the start of 2023 at least. Digital brokers will continue to consolidate loads because they get more money out of that shipment compared to the premiums they were paying on FTL. Though there may be several shippers utilizing one truck and FTL is easier to procure than LTL, when properly audited, shippers can save significant money during a procurement cycle by consolidating shipments with an LTL carrier. –Chris Cassidy, Chief Revenue Ocer, Trax Technologies With businesses finding new ways to integrate technology into their logistics strategy, I expect shared truckload to take greater market share over truckload and less-than-truckload. After more than a century stuck between the choice of hub- and-spoke and paying to ship air, shared truckload is a smarter alternative. –Oren Zaslansky, CEO, Flock Freight Shared truckload
In 2023, the shipper-carrier relationships will need to strengthen into a true partnership. Gone are the days when transactional relationships will drive ef ciency. With a softer domestic economy, shippers and carriers must come together through joint business planning meetings, open dialogue, and free ow of data exchange. We can do that by improving our processes, communication, and strategic planning. We cannot change the length of the haul, the speed limit, or the product that needs to be moved. But what we can do is give both the shipper and carrier a seat at the table during planning meetings, invest in technology that exchanges data better, and listen to one another about our respective needs. –Greg Gantt, President and CEO, Old Dominion Freight Line
QUICK LIST
3 things to keep an eye on in 2023: 1. Fuel prices
2. Wage in ation 3. Pricing pressure
2023 in a nutshell: Excess capacity, carrier consolidation, and focus on cost controls. –Frank Granieri, COO, A. Duie Pyle
January 2023 • Inbound Logistics 215
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