Small trucking carriers — as represented by load board spot capacity — are freely taking price in the last few weeks before Black Friday and the truly frantic period of peak retail season. Los Angeles continues to suffer from an array of capacity constraints, from space on inbound container ships to port throughput, warehouse labor, truck availability and intermodal capacity.
Spot rates from Los Angeles to Dallas spiked 11.5% week-over-week on Truckstop.com’s load boards, a level of volatility that suggests freight demand has completely outstripped supply and rational price discovery is breaking down. The cooling phase or lull that had settled over trucking markets now appears to be over and done with.
For freight brokerages, a market like this one does not just mean seemingly endless margin pain, although there’s that too. Contract rate renegotiations and freight givebacks represent opportunities for brokerages with long-term strategies that will exploit this period to firm up their relationships and grow contracted accounts. The creativity brokers resort to in this period — and the operational muscle they develop — will serve them well if they choose to go down the path of doing more for their customers rather than less.
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