U.S. freight rates are peaking as inflation becomes less acute, according to CNBC.
Inflation eases: A new report from the Cass Freight Index Systems shows U.S. freight rates have jumped 28% year over year but eased off about 2% month over month in July, suggesting that freight rates have peaked.
- “We’re coming into this peak season with much more free capacity,” said Cass Freight researcher Tim Denoyer. “I think that’s going to be a good thing from a cost perspective for those big retailers who have been struggling with a lot of cost inflation.”
Employment needs: “[I]n 2021, the American Trucking Association released a report finding the nation’s trucker shortage reached a record 80,000.”
- “That report also found 1,000,000 new truckers would be needed over the next decade to maintain current levels.”
Capacity issues: Companies and drivers are hesitant to enter the trucking industry as used class 8 truck sales prices have doubled since 2019. This price hike and the driver shortage has put pressure on freight capacity.
- “U.S. truck prices have become a significant barrier to entry,” said Denoyer. “I think that’s going to continue and that has been a big factor for capacity.”
What we’re saying: “A decrease in freight rates is as a positive sign for shippers, but bottlenecks from port congestion to container return availability to overall trucking shortages are still in need of policy remedies,” said NAM Director of Infrastructure, Innovation and Human Resources Policy Ben Siegrist. “We’re not letting up on our advocacy on all those fronts and will continue putting the needs of manufacturers in front of key decision makers in D.C.”