http://news.freightaccess.com/?p=365: By Brad Hollister
Freight charges are usually getting driven higher by leaping truck diesel powered fees and tightening truckload capacity.
A widely followed monthly logistics index of U.S. Freight transportation has surpassed levels last month which present what supply chain executives, third party logistics gurus, and trucking companies are confirming: lowered freight capacity as well as growing diesel fuel rates are generally triggering transportation fees to increase much more quickly than volume.
The Cass freight transportation index, released by freight audit and payment company Cass Information Systems, is a collaboration of freight bills and shipments of the 400 manufacturers, distributor, and warehousing companies which make up Cass' customer base. The freight logistics index has reported more than six percent jump from February 2011 to March of 2011 which shows soaring transportation costs. Transportation rates continue to rise roughly thirty-four percent from cost levels of just one year ago.
While the unpredictable winter weather patters produced by the month of February generally affects freight tonnage, the newest transportation report released by Cass Freight Bill Auditing displays nearly a seven percent increase in the number of freight shipments over the same period in 2010.
Numerous supply chain executives believe that this craze will continue throughout the year. Top freight marketplace authorities are predicting further tightening of freight capacity and increasing soaring diesel fuel rates will increase transportation fees significantly throughout the year. Most of these freight marketplace professionals see this trend continuing throughout the rest of 2011.
The Cass freight index has used the increase in transportation volumes to present that an economic recovery is underway in the U.S. Although lots of economists have presented evidence supporting the viewpoint that an economic recovery is started, some other less positive analysts are concerned with other hurdles which have to be overcome before unbridled recovery can occur. On major concern for all freight marketplace consultants is the sky-rocketing price of oil. The average price per gallon of diesel fuel is up more Twenty-Five Percent (or more than One-Dollar) from this period last year. Nationally, the price of fuel has varied greatly, with California and New York reporting the highest diesel fuel costs, the average expense of diesel now surpassing the $4.50 per gallon.
Main Supply Chain Analysts at JPMorgan Chase, reported research which advised that the present growth in freight shipments presently underway in the freight marketplace has been considerably better than the increase during the last growth pattern for trucking companies, which occurred between 2004 and 2006. JPMorgan Chase analysis seemed to be also careful to not that freight shipment growth during February of 2011 could be explained by the milder than normal winter which much of the mid-west experienced, when compared to other years.
A lot of masters view the Cass transportation transportation index as a measurement of volume trends in the less-than-truckload and truckload markets. These experts believe the shipment freight index is mounting at a quicker pace than the industry's daily shipment volume figures, an indication that the firm's first-quarter industry volume estimate seem to be a conservative estimate going forward.
As a result of fragmented nature of the truckload marketplace, it a lot of specialists agree that connecting the Cass Transportation index with the freight marketplace trends in truckload is much increasingly difficult to perform and derive definitive trends from. Freight marketplace results are suggesting existing demand for truckload freight transportation is trending in accordance with or slightly above average demand patterns of the historical truckload business cycle.
So far in 2011, the freight transportation data indicates a transfer of power back to the hand of the freight carriers and owner operators. As exhibited by the first three months of 2011, capacity has become tougher to come by and truckers have been able to command much higher rates for freight shipments and cargo deliveries. Multiple economic factors have helped trucking companies and nationwide fleets restore bargaining power, including the climbing price of diesel fuel. Govt imposed mandates and regulation have also constrained the free market operation of most trucking fleets and owner operators which have squeezed operations and increased the price of conducting business. Several authorities believe this craze to continue throughout 2011, whether or not an economic recovery gains additional momentum.
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SUMMARY:
The Freight Marketplace is having a change in negotiating power from shipper & 3PL to freight carrier and truck driver. Freight demand and shipment tonnage continues to outpace truck capacity driving freight quotes higher. Shippers, manufacturers, and third party logistics firms are experiencing difficulty finding access to freight carriers and trucking companies at contract payments they had formerly had negotiated.
***************AUTHOR*************************************
Brad Hollister is an Knowledgeable Freight Executive with Freight Access (Freight Access.com ). Hollister has a appreciation for Business Development interest in most recent technologies. Contact him with at BradHollister.com. (Brad Hollister ).
***************KEYWORDS*************************************
freight marketplace, transportation, logistics, supply chain, carriers, owner operators, truckers, drivers, cargo, freight
Yes infact all the major manufacturing giants and small miche producers have also witnessed this. You have submitted a great post as still many people don't know about it.
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