2016 brought about so many unexpected events that the general public was happy to see it end. Memes and social media posts in December centered around the mass-agreement that the year was terrible and needed to go. One group even made a trailer for a mock horror movie that portrayed the year 2016 as the antagonist.
When we look at some of the industries that didn’t get such public attention, but would also agree it was a rough year, none would speak louder than trucking. It began the year with modestly-increased demand from 4th quarter 2015 lows, but circumstances were not conducive to a thriving, bountiful journey through the rest of the year. In the Logistic Management article, “2017 Rate Outlook: Will the pieces fall into place,” writer Patrick Burnson quotes trucking analyst John Larkin:
“Truckload carriers grappled with persistently weak spot market pricing and contract customers who abandoned talk of collaboration and reverted to aggressive, Neanderthal style pricing tactics. Weak consumer demand, bloated inventories, sluggish industrial activity, and the strong U.S. dollar all contributed to a soft freight market. Carriers endeavored to tighten supply and demand and protect equipment utilization by downsizing their fleets.”
Burnson relayed Larkin’s comments that late last year, many carriers finally stood firm, “suggesting that they would rather park trucks than haul freight at non-compensatory rates, indicating that the sector might be near the ‘pricing trough.’”
Suffice to say, truckers have been as happy as anyone to see 2016 come to an end.
This, of course, will translate to carriers asking shippers to restore rates to fully compensatory levels. If you haven’t been using a shipper under contract, you can expect your rates to go up.
What of our other transportation friends?
Rail and air stand as the least predictable, but least likely to show a significant increase in rates. On the other hand, ocean cargo, with rates that declined to all-time lows last year, is slated to finally correct. Rates are predicted to jump so high that it may come as a shock to logistics managers. Container freight rates are forecasted to increase by over 10%. This would also be the first year since 2010 that contract rates will increase.
With shipping rates making a jump overall, especially by ground and sea, it is vital that you protect your assets. Problems like Bill of Lading issues and damage to cargo will cost even more to reconcile. (Read our articles on BOL mistakes and protecting your ocean cargo.)
If you’re looking for peace-of-mind packaging, Packnet’s team of experts provide both custom and standard solutions. We offer a variety of materials and can utilize a number of other measures, like corrosion inhibitors and recording devices, to ensure you get cost-efficient packaging that fully protects your products and your business. Contact us for more information: 952-944-9124; CustomPackagingSolutions@packnetltd.com.