SCD: Trucking expects LTL, TL rates to soar through 2021

SUPPLY CHAIN DIVE reports:

– Truck capacity will likely stay tight through the year, according to multiple analysts. That means carriers can expect continued benefits from elevated rates in the TL and LTL sectors. 

– Rate per mile in the TL market is set to grow through the end of 2021, according to the recently launched Cowen/AFS Truckload Freight Index. On the LTL side, the report projected that rate per pound will grow sequentially in Q4, despite the fact that weight per shipment has been decreasing since March.

– Morgan Stanley said in an Oct. 6 report that sentiment in the trucking industry “remains notably hot.” Industry respondents said they don’t see an end to current freight conditions, and 2022 TL rates are expected to be up approximately 5.25% compared to this year.

Trucking experts said in April they didn’t fear a bust in the market this year. That attitude remains, as multiple stakeholders expect continued demand.

“Commentary was overwhelmingly positive focusing on market tightness and rising rates supported by strong demand and no drivers. Capacity was front and center [in] this update as almost all respondents noted capacity tightness with little to no expectations of any loosening,” according to the Morgan Stanley report.

Capacity constraints will push up prices on the LTL side, as the top 10 carriers control 75% of all LTL freight, according to the Cowen/AFS index. And the lighter loads the report noted are likely due to increasing levels of rollover parcel freight from e-commerce.

But, as demand rises and networks become overwhelmed, service decays…

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