CAI Transportation Blog

Understanding logistics rates in the current market

Pricing in the transportation sector can be a source of frustration for many logistics managers. Factors that can affect rates in the truckload spot market create a domino effect that causes fluctuations for other services. Since your obligation is to get your company’s goods where they need to go safely and on time (preferably without breaking the bank), you may have found yourself frustrated by the many complex interrelated trends in the industry in the last year or so.

Having an understanding of the broad trends that affect market prices can help you make stronger and more sustainable decisions for your company. Let’s look at some of the factors that affect truckload rates in the spot market and the contract market, and how they relate to each other.

A year in logistics industry trends + how to prepare for the future

As we approach the end of another year, it’s a great time to look back on what’s happened in the past twelve months and plan for the year to come. It seems like every year is action-packed for the logistics and transportation industries, and 2018 has been no exception. Technological, economic, and regulatory factors have all created a challenging market for shippers, highlighting the importance of strong relationships and proactive planning.

How will IMO 2020 affect ship capacity and freight rates?

Fuel costs will rise by an estimated 25 percent (approximately $24 billion) in 2020 when the new International Maritime Organization (IMO) sulfur rules take effect.

The IMO, the United Nations body responsible for the shipping sector’s safety and environmental performance, aims to cut maximum sulfur emission from 3.5% m/m (mass by mass) to 0.5% m/m starting in January 2020.

Even as the new sulfur emission rate deadline draws near, the industry appears ill-prepared. The IMO sulfur rules are likely to mark the beginning of an uncertain era for not just the shipping industry, but many other sectors, as over 90 percent of global trade operates via the sea.

Let’s explore how the IMO 2020 regulations will affect capacity and freight rates:

5 ways to beat high freight rates and secure capacity

‘Tis the season for high capacity demand and even higher freight prices. According to the DAT, spot market rates were at record highs in June and are set to climb in single digits through 2019. Even companies like Kraft Heinz and Coca-Cola are raising costs to offset higher freight expenses.

Covered deeply in the logistics industry, rising transportation costs is a serious issue. With many factors coloring rate fluctuations like scarce capacity, the driver shortage, regulations, tariffs hikes, fuel price surges, and booming economic growth, logistics leaders face everyday pressures to overcome escalating prices.

Why a consultative approach leads to the most successful 3PL partnerships

With the holiday season in full swing, driver capacity scarce, and shipping expectations at an all-time high, it’s easy for shippers to feel the pressure. So how can you provide excellent, yet affordable, shipping services in this environment?

More and more, the answer points towards working with a consultative logistics partner who’s invested in your growth. But paying for a great shipping partner can seem like just another expense—especially when logistics budgets are tight.

Luckily, choosing the right logistics partner can actually reduce costs over time, streamline your operations, cause fewer headaches, and help you develop better long-term strategies for your business’ success.

Let’s explore the benefits of partnering with a consultative 3PL.

Why You Need To Work with a C-TPAT Certified 3PL

Global supply chain professionals have to overcome challenges like navigating natural disasters, filing the right paperwork, and staying compliant with tightening regulations. Global shippers also need to remain vigilant of terrorism and cyber-attacks. These types of crimes can shut down airports and shipping docks which delay shipments and raises costs.

Though completely avoiding terrorism is almost impossible, you can mitigate these risks by working with shipping partners who have the Customs-Trade Partnership Against Terrorism (C-TPAT) certification.

What you need to know about 2018 holiday season logistics for retail + e-commerce

Last year’s holiday season will be a tough act to follow. In 2017, retailers pulled in a staggering $691.9 billion dollars in the United States alone—a 5.5% increase over 2016. While that same level of year-over-year growth may be out of reach, according to the National Retail Federation, this year’s holiday season shopping totals are still projected to increase a healthy 4% over 2017, with estimated totals nearing $720 billion.

These eye-popping sums bring attention to the importance of strong logistics practices in the retail sector. In order to capture the full value of their biggest quarter of the year, traditional retailers and e-commerce operations need to have detailed plans (and backup plans) in place to move their shipments safely and on time.

What is the role of rail in today's capacity crunch?

When you’re managing freight through different touchpoints, you shouldn’t leave rail out of the conversation. Today’s capacity crunch and the role of rail was the central focus of discussion for this year’s North East Association of Rail Shippers (NEARS) bi-annual conference.

As a leader in the global logistics industry, AVP of Sales and Development at CAI Logistics Carl Citelli was a participant on a panel titled, "All modes in a serious crunch: capacity issues in the industry,” to find answers to some burning questions.

Warehouse technology that helps increase capacity

Today, logistics managers look for any chance to lower costs and increase capacity. Yet many continue to ignore a huge optimization opportunity: their warehouse.

Despite other industry advancements, traditional warehouses continue to hold onto legacy practices. They use paper logs, inefficient barcodes, and disorganized management software. But with e-commerce demand on the rise, and warehouse capacity shrinking, it’s more important than ever for logistics and warehouse managers to use their space efficiently.

3 ways e-commerce is changing the logistics industry

Two decades ago, when e-commerce was a nascent idea, there were very few companies trying to sell products online. Because it took consumers a few years to warm to the idea of online shopping, early e-commerce operations didn’t have the need for the expansive logistics operations that currently power giants like Amazon or Wal-Mart.

However, as e-commerce has caught on and the scale of business has steadily risen, online businesses have had to find more ways to compete in a crowded marketplace. To stand out from the crowd and maintain customer loyalty, most online retailers find themselves continually trying to offer faster, cheaper shipping or easier returns. This often means totally rethinking their fulfillment and logistics processes.