There’s no doubt that the freight market is always changing. In each quarter of the year we can see how different trends impact the whole industry. Nothing is completely sure, and there are multiple factors that can change the path of the market. That is why we want to show you a Market review for mid-September.
We spoke with experts in our company, and they gave us a market review for mid-September:
Joel McGinley, our Managing Director, says that the freight market has entered an interesting pattern. He thinks it’s more of a normal pattern, where we saw freight peak at the end of the second quarter and then drop off after the 4th of July holiday. In addition, he says that it started to strengthen before the Labor Day weekend and believes that it will continue to be strong up until about the 3rd to 4th week in October.
He also says that 4th quarter doesn’t look as promising, and the first quarter of next year looks perhaps to be weaker than we’ve had, especially given what’s going on with housing starts, and just the whole housing market in general that’s probably going to throw a bit of a wrench into next spring. He concludes that it’s going to be very normal with a lightening or slowing of volumes and rates as we get beyond November.
We also heard from Mariana Valencia, our Sales Director. She began by saying that the third-party logistics market in the U.S. is estimated at US$238 billion for 2022 and is forecast to reach an estimated market size of US$328 billion by the year 2026, which represents a compound annual growth of 9.9% over the next 4 years. This means to her that the industry is currently growing, and that is going to be the trend for some years to come. She believes that there are many reasons for this growth. She says, “We can see an increase in demand for manufactured goods resulting in a need for well-organized supply chain logistics, and this brings a lot of opportunity for 3PLs”.
She thinks that big companies are realizing that partnering with a full-fledged 3PL brings many benefits. It gives them access to all the resources and network that the 3PL has. Also, since the 3PL model eliminates the need for maintaining an in-house workforce, machinery, vehicles, and warehousing capabilities, enterprises can free up their financial and human resources to maintain a rigid focus on improving business competencies.
She also argues that this growth brings challenges for 3PLs to remain relevant and be considered a good partner for enterprises. She acknowledges there is a threat to the manufacturer’s good name due to 3PL’s mistakes, which can cause the manufacturer’s rapport with their customers to deteriorate. The reputation of the manufacturing company suffers when a 3PL service provider is unable to complete an order by the deadline. So 3PL leaders need to start implementing technology solutions that make you more efficient, train your employees to deliver better service, and stay on top of the current market situation to be able to adapt as needed.
Our COO, Elizabeth Velez, gave us her perspective, saying that from what we can see from our customers, operations and volumes, we feel confident in saying that the market is increasing its volume. She continues by saying that it is nice to see volume picking up, as it will bring an end to the uncertainty that hurts all markets so much and gave us more to celebrate this year for Driver Appreciation Week because manufacturers are bringing out more merchandise, which is also increasing the number of loads to cover.
To conclude, she argues that truck postings are another indicator that seems to be increasing, reassuring us that the market is on its way to feeling normal again. We will continue to monitor our market, but mostly we will continue to help it get back to healthy volumes by providing more efficient loads and more efficient processes that will impact our market and our drivers.
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