What's going on with high freight rates?

What’s up with freight rates?

More than 18 months into the pandemic, the disruption to global supply chains is getting worse, spurring shortages of consumer products and making it more expensive for companies to ship goods where they’re needed. –CNN Business

You’re not alone if you’re struggling with the higher-than-normal freight rates. The cost of shipping in July 2021 was 22.7% higher than in July of 2019 and a whopping 43% higher than in 2020 while August’s numbers jumped 11.3% from July. 

According to Tim Denoyer of ACT Research, “extraordinary growth rates are expected to extend through the near term. . , and if the index follows normal seasonal trends, it will log a 35% full-year increase in 2021.” Denoyer explained these are “the largest rate increases broadly in freight we’ve ever seen.”  It’s  a direct result of supply shortages and high demand. 

Most experts believe that the supply chain, and in particular, trucking routes are continuing to show disruption as a result of the COVID-19 pandemic.

So what happened to your freight rates?

As the COVID pandemic took off, economies around the world basically shut down as companies went into lockdown mode, schools went online, and restaurants, retail locations, and personal care services closed their doors. During this time, many truck drivers left the field which was already suffering a shortage of competent drivers for a variety of reasons–stagnant wages, difficult working conditions, not to mention the Drug and Alcohol Clearinghouse.

When businesses and the economy began to open back up in the fall of 2020, consumer demand coupled with diminished truck capacity and a supply chain suffering from continued disruption blew rates up and will continue to do so into 2022.

For a detailed look at red-hot rates in August, check out this article on FreightWaves.

What can you do about high freight rates?

Here at AM Transport Services, we know shippers like you are suffering with higher rates. Because relationships are at the heart of what we do here, it’s important you understand some of the fundamentals of what is happening in the trucking market and why. If you are concerned about rates and would like to know more about what you can do and how you can navigate these unprecedented times, we’d love to talk to you about dynamic pricing and short-term contracts.

We work with a core group of small to mid-sized carriers. They are respected leaders in the trucking industry run by honest, hard-working people with excellent reputations and skilled professionals. You will not find better carriers or drivers in the midwest.

When you work with AM Transport, you gain the power of relationships we have spent years building with these trucking companies. We’re able to negotiate fair and consistent rates while preserving the level of service our customers demand because of these long-term relationships. Trucking is a fickle industry, and premier carriers can be choosy, especially now.

You deserve the peace of mind working with great carriers provides from consistent reliable rates and on-time pickup and delivery to real-time tracking and excellent communication. You don’t have to settle for less. If you’d like to know more about the AMT advantage and how we can help you, please give us a call today.