Sunday, September 03, 2023
A freight market turnaround in 2024?
Spot rates will likely increase, benefitting carriers but potentially causing challenges for shippers.
Shippers may face higher shipping costs in 2024, and freight brokerages could be particularly impacted as shippers prefer asset-based carriers in their routing guides, reducing broker volumes.
The “spread,” which measures the cost difference between contract and spot rates, remains near record levels, and it is expected to tighten as spot rates rise while contract rates stabilize.
Looking ahead to 2024, conditions for carriers are expected to improve in the second quarter, potentially giving them the upper hand in negotiations with shippers.
Carriers should prepare for higher volume and rates by right-sizing their businesses and reassessing their pricing structure, where possible.
On the other hand, shippers should benchmark their freight costs, lock in contract rates, or use index-linked contracts to manage rate and capacity risk as the market turns tighter in the coming months.
We asked our VP of Brokerage & Enterprise Sales for comment:
To navigate these shifting market conditions, Legacy continues to leverage our asset- and non-asset-based models to secure capacity for our customers. We continue to leverage our Real-Time Rating technology to increase accuracy and keep rates consistent and stable for shippers in a more volatile freight market.
-Aaron Zofkie, VP North American Transportation & Enterprise Sales
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