Is freight more concentrated?

Yes, freight volumes are becoming more concentrated – the largest 25 markets are taking share from the bottom 50. But so far we’ve seen only a modest shift in volume balance which we believe is unlikely to alter prevailing trends in spot rates (low) and capacity (abundant).

In last week’s Passport Research webinar, we were asked if we noticed the concentration of volumes in fewer markets and our view on whether that trend would continue. At the time we hadn’t really looked into it, but immediately we recognized that depending on the degree of concentration, it could have important implications for how asset-based carriers allocate capacity and how brokerages price freight, both between healthy markets and into and out of contracting markets.

In this piece, we break down the concentration thesis and quantify it by tiers of markets, looking at both the largest markets and what might be considered the second-tier of regional markets.

Then, in the last section of the report, we identify some emerging opportunities, defined as markets with lower than typical volumes and market shares that we believe are posed to snap back in the near future. Those markets include Los Angeles, San Francisco, Chicago, Joliet and Detroit.