North American Freight Market Insights

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Transportation Market Overview and Freight Trends

TOP STORY: Truckload spot market offers opportunity

Are contract and spot market truckload strategies compatible in a route guide? Yes. Recent research sponsored by C.H. Robinson with MIT's Center for Transportation and Logistics helps further our understanding of route guide performance and points to how you can most effectively account for unplanned freight in your route guide.

Traditional hierarchical route guides often have one or more primary service providers awarded to a lane. In the event the primary service provider does not accept the shipment tender, standard procedure in most transportation management systems (TMS) is to tender the shipment to the backup providers. Through years of academic research on route guide performance, C.H. Robinson has seen the impact of cost from shipment tender rejection, pursuing backup coverage, and delayed offering of shipments to the spot market.

Even in an oversupplied market and when spot pricing is below contract pricing, a shipper can pay a premium in the spot market. The amount of time it takes to exhaust the long tail of backup providers in a route guide is likely the cause.

Consider that many TMS processes allow a backup provider 45–90 minutes to respond to a tender. If there are 5–10 backup providers, a day is nearly exhausted before a transportation team seeks coverage in the spot market. That spot market exploration typically happens in the afternoon for next day pick up. This scenario tends to result in higher than average spot market pricing and the premium seen in the research.

The effectiveness of the backup route guide has limits

Recent research has found the effectiveness of the backup route guide has limits and offers insights that can help you shape a more effective route guide backup strategy.1

Research suggests:

  • Route guide performance is directly correlated to market tension
    • Market phase (tight or loose) is the leading attribute to tender acceptance and route guide performance
    • Tight markets tend to result in underperforming route guides
    • Loose markets tend to result in high route guide performance
  • Deep backup positions are of little use and value
    • Loose market route guides tend to fully perform by the second backup; additional backup assignments tend to be unnecessary and unused
    • Tight markets tend to see the fourth backup as the extent of a route guide’s ability to support rejected tenders

Below is a table showing a route guide and summarizing the loose and tight market findings

Rank Provider Price Loose market insight Example years 2016 and 2019 Tight market insight Example years 2018 and 2021
Primary A transport Price A Very high acceptance rate Most loads covered
1st backup B transport Price B (A + backup premium) Very high acceptance rate Most capable backup slot
2nd backup C transport Price C (B + backup premium) Most loads covered by this point Fewer backup tenders accepted
3rd backup D transport Price D (C + backup premium) Seldom needed/used Fewer backup tenders accepted
4th backup E transport Price E (D + backup premium) Seldom needed/used Most loads covered by this point
Seldom needed/used Most loads are rejected
9th backup J transport Price J (I + backup premium) Seldom needed/used Most loads are rejected
10th backup K transport Price K (J + backup premium) Seldom needed/used Most loads are rejected

In short, there tends to be a premium cost for each tender rejection over the primary service provider. If a shipment exhausts the route guide with backup providers declining the tender and the spot market being the ultimate coverage, the premium cost can range 23–35% based on the market condition for that late access to the spot market.2

Route guides are exceptional vehicles for plannable freight where the primary suppliers accept freight and immediate backup suppliers cover rejections of the primary.

The time spent tendering to backup providers after these noted thresholds consumes time and leads to less capable spot market engagement.

Backup performance can be improved

To improve the backup performance of a route guide, positioning a digitally enabled spot market response somewhere between the second and fourth backup provider will eliminate the time lost from multiple successive tender rejections.

For more information on this strategy, please contact your C.H. Robinson representative and check out our real-time connectivity information.

North American Freight Market Insights | C.H. Robinson

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Full Truckload Shipping

TOP STORY: One month does not make a trend, but the market has something to watch

A leading question from most participants in the truckload market is, “When will the market be shifting to the early phase of recovering balance?” Realistically, knowing when that might occur is less than precise since each of the market phases are descriptors of the market cycle versus mathematical representations of the market.

Perhaps the market will experience some improvement in balance as the year progresses due to an increasing number of corridors displaying a balance in tension along with stabilized and increasing prices. Perhaps the market is currently in the latter half of the "oversupplied" phase, working toward recovering the market to balance.


The DOT carrier operating authority from FTR and jobs insights from BLS (Bureau of Labor Statistics) seasonally adjusted trucking jobs figures offer some perspective. However, it’s important to note that as the market moves toward the beginning of the next cycle with recovering balance, spot market tension and route guide performance may display the market shift before the balance is evident in capacity and labor figures.

Net revocation of DOT operating authority (Loss) New carrier creation (gain) Net operating authority change BLS trucking job change
January 9350 5886 -3464 +4300
February 7393 6267 -1126 -5100 Preliminary
March Forthcoming Forthcoming Forthcoming +5700 Preliminary

Recent insights offer some context on the table above:

  • Net revocation of operating authority represents all the reasons—both voluntary and involuntary—operating authority is revoked and reinstated. The figure is a net loss in operating authority.
  • New carrier creation represents newly created operating authority. It includes new entrants to the industry and carriers reincorporating under a new name and operating authority. The figure is a net gain in operating authority.
  • Net operating authority change. This figure is the sum of net revocation and new authority figures published by FTR in their April Truck report.
  • BLS trucking job change is from the BLS April 7 employment report. It shows the net change in trucking jobs. Note that BLS largely captures trucking companies with payroll, leaving self-employed (most owner-operator) carriers not counted.

In assembling these market references, it is possible that carriers across the spectrum from self-employed owner-operators to payroll based fleets, experienced a net contraction for U.S. trucking in February.

While one month does not make a trend, the March preliminary trucking jobs figures from BLS shows a growth in fleet carriers. On the surface, this presents a conundrum. It seems implausible that trucking capacity expanded in March with the market nearing a year of surplus capacity to available freight. A more likely scenario is that the continuing high levels of net revocation of operating authority in the owner-operator community results in some fleets adding drivers with some months being growth months and others contraction.

The truckload capacity market is experiencing some fluid movement in and out of the market as well as within as it strives to bring some balance broadly between market freight volumes and active capacity.

Now is an exceptional time to work on a full load strategy before the next up-cycle. Connect with a C.H. Robinson representative to learn more about segmenting your portfolio of truck and intermodal lanes by key market and discuss process attributes that can enhance your procurement and route guide results during all phases of the market cycle.

National LTR averages


Dry van LTR

Dry van is the largest segment of the truck market. It is often the primary reference for the U.S. truckload market performance. For context, the dry van spot market is a bit tighter than the loose year of 2019. It seems to have bottomed out with little change in the experience accessing capacity.

Shown here is the nationwide U.S. DAT LTR for dry van spot market for the years 2018 through 2022 and the first 15 weeks of 2023 plotted in red. Week 15 LTR was 1.6:1 and the 5-year average was ~2.7:1. It seems likely this market will moderate a bit in this range for the near term.

dry van to truck 5 year comparison

Refrigerated van LTR

Refrigerated truckload is following a similar pattern to dry van, matching the patterns of 2019 and 2020. Seasonal and regional tension impact this mode of trucking as spring brings early harvest of produce in Florida and expands across the United States with growing and harvest seasons.

This year may not result in some of the historical produce season tensions due to the level of available capacity. Week 15 was 2.6 against the 5-year average of ~5:1.

Fresh produce season will introduce additional regional pressures that follow growing regions in the South and their northward migration into the fall.

refrigerated load to truck 5 year comparison

Flatbed LTR

Today’s flatbed spot market continues to offer plentiful capacity in most markets with LTRs well below historical averages and spot and contract pricing closely aligned. Week 15 load to truck ratios were 11.6:1 against the 5 year average of 48:1.

flatbed load to truck ratio 5 year comparison

Regional LTR averages

National averages are helpful for aggregate perspectives of the market. But trucking is a very regional business. Each week displays the varying experience of the trucking market. Shown below is week 15, April 9–15, 2023.

When developing truckload strategies and evaluating performance, consider the broader market capability. Some markets are in balance while others may be over or undersupplied against meaningful volumes, where other markets may have little trade and freight. The freight experience in these markets should influence strategy and they will vary as the annual cycles are experienced.

Note how the colors indicate different ranges of LTR by each of the three truckload services. Some lanes from an origin may perform better or worse than the LTR might indicate. Research and experience confirm that an origin-destination pair can have more or less attractive features to the capacity market than the regional average tension might indicate.

Regional dry van LTR

Dry van displays a green level (2.2 to 3.4 LTR) broadly across the United States with some balance displayed east of the Mississippi River up to the East Coast. The national average is 1.6:1 against a 5-year average around 2.7:1. Broadly speaking, spot market capacity is readily available in all markets when a day's lead time is offered.

Dry van spot market heatmap DAT - C.H. Robinson freight market insights 11.17.22

Regional refrigerated LTR

Expect the southern growing regions to show the first signs of produce harvest. Those first markets will be Florida, the Texas Valley, and Southern California. National LTR average for week 15 was 3.2:1 range against a 5-year average around 7:1.

Reefer spot market heatmap DAT - C.H. Robinson freight market insights 11.17.22

Regional flatbed LTR

Today’s flatbed spot market LTR shows some regional tension in Louisiana, Alabama, and Mississippi. Broadly, the flatbed market offers plentiful capacity for spot and contract services nationwide.

Flatbed heatmap DAT - C.H. Robinson freight market insights 11.17.22

Contract truckload environment

Most (75%–85%) of the U.S. for-hire truck market is moved through commitments most often managed via hierarchical route guides and dedicated truckloads. Most analysts are now offering that a material shift from 75% (some analysts suggested an even smaller share) of freight in the contract market in 2021 and early 2022 back to roughly 85% (some suggest a bit more) of freight in the contract market currently.

Route guide performance

Companies commonly use waterfall (or hierarchical) route guides to manage awarded freight on lanes with some level of demand pattern predictability. The following insights are derived from TMC, a division of C.H. Robinson, which offers a large portfolio of customers across diverse industries throughout the United States.

Two key metrics of route guide performance are first tender acceptance (FTA) and route guide depth (RGD). RGD refers to how far into a route guide a shipper must tender shipments before carriers accept loads, or the average number of tenders per load. FTA is a percentage of how often the first awarded transportation provider accepts their shipment tenders.

These insights are from the week of April 9–15 and also reflect on RGD from the month of March 2023.

RGD by U.S. region

The regional view continued to show the Northeast displaying the most challenging RGD, while also offering the greatest improvement. The February national average RGD improved by 3% M/M and resulted in a 31% reduction in RGD compared to February 2022.

The week of April 9-15 offers a virtually unchanged RGD report compared to four weeks prior. The Northeast pattern continues with the highest RGD of 1.19, which is improved from 1.28 last month. The national average is at 1.14

Broadly speaking, route guides are performing well, with primary service providers accepting loads at pre-pandemic levels and the first backup provider accepting rejected tenders most of the time.

Routing guide line graph - TMC + C.H. Robinson freight insights 11.17.22

The chart above from TMC, a division of C.H. Robinson, reflects weekly RGD regionally across the United States through the week of April 9-15.

March FTA for North America improved a point to 91%

This FTA is slightly better than February's 90%. The year over year (Y/Y) comparison is 82% for March 2022.

March RGD across distance bands

Broadly speaking, today’s market is flush with capacity. Load tenders from hierarchical route guides are typically accepted by the primary awarded supplier. When rejected, they tend to be those that are unattractive to carriers for one reason or another.

Aside from load attribute issues, such as unpredictable load tenders or short lead time, route guides continue to show the Northeast region is underperforming in comparison to the balance of the country.

Loads with length of haul under 400 miles continue to show higher FTA and lower RGD than other distance bands. Carriers are accepting all distance bands much more readily with a recent correction as shown in the image above.

For March, the shorter distance bands outperformed the long distance band

  • Short haul (less than 400 miles) posted an improvement in RGD of 1% from February and 22% improvement Y/Y—about 1.1.
  • Middle distance (400–600 miles) improved 3% from February. This is a 22% improvement from March 2022.
  • Long distance (over 600 miles) RGD fell back 1% from February. At 1.18 and 28% better than March 2022, this is the best RGD performance for March in the past six years.

U.S. spot market dry van truckload rate per mile insights

The latest dry van spot market cost per mile forecast is updated with the results of the first quarter’s oversupplied truckload marketplace. This forecast includes the historical seasonal influence of produce season, summer beverage season, and some fall volume to support the holiday season. Seasonal influence is muted in this market with a year-end cost per mile forecast near where the year began.

This year’s freight experience is similar to 2019, which was the market’s last oversupply year before the shutdown of economies in March 2020 and the introduction of the pandemic period.

The spot market experience and forecast will be influenced by freight volume and carrier response to the oversupplied market. Should the market respond with additional contraction of active capacity, market tension and spot market pricing would be expected to increase.

It would seem a change in the 2023 forecast is likely more dependent on the contraction of active capacity than an unexpected change in freight volume forecasts.

C.H. Robinson 2023 dry van spot market cost per mile forecast

Shown below is the C.H. Robinson 2023 truckload dry van spot market cost per mile forecast without fuel. Like others, this forecast has been and will continue to be amended as economic forces shape freight volumes and the capacity community responds.

  • The dark blue solid line is DAT’s broker cost per mile paid to carriers without fuel.
  • The light blue dotted line is the C.H. Robinson forecast for 2023.
  • The forecast is bounded on the bottom by the estimated cost per mile to operate a truck.

When looking at previous market cycles, the cost per mile to operate a truck has been the bottom of the market. Then supply tends to contract, creating tension and pricing inflection. The length of time a market is at the bottom varies by the economic conditions and the level of oversupply.

The C.H. Robinson April forecast shows the bottoming out at the estimated cost per mile to operate a truck twice. This monthly update continues to display some normal seasonal movement in dry van spot market pricing, but muted due to the current supply imbalance.

Contractual pricing that is very low, may result in stressed route guides during the seasonal summer bump and year end run up. It is possible if contract pricing is exceptionally low to experience some first tender rejections during the seasonal moves and higher back up pricing until the seasonal softening between summer and late fall as well as Q1 2024 unfold.

C.H. Robinson will continue to apply its broad market costs and market experience to the forecast and continue to present updates on a regular cadence. The market is evolving with freight tonnage challenged, with a 5.4% decline sequentially all while active capacity contraction appears to be occurring.

Spot market forecast - C.H. Robinson freight market insights Nov. 2022

DAT national dry van linehaul cost per mile is the broker price paid to carriers per mile, which excludes fuel surcharge. The C.H. Robinson forecast is an extension of that cost. Estimated cost per mile to operate a truck is a C.H. Robinson forecast based on the American Transportation Research Institute (ATRI) historical costs to operate a truck through 2021.

When reflecting on the average cost per mile to operate a truck, note that this is a national average across the carrier community. Accordingly, it aggregates carriers of all sizes—from owner-operators to the largest fleets.

Each carrier will have a different cost to operate per mile based on a host of variables with a key variable being the amount of empty (non-revenue generating) miles the carrier experiences.

The smallest carriers tend to be involved in the spot market with a larger percent of their freight portfolio. They experience the greatest pressure on operating ratio in market periods like now, which leads to a reduction of active capacity as a result of parking trucks, scrapping older trucks, and exporting used trucks from the country.

The large portfolio of shipments C.H. Robinson handles is just one of the reasons carriers choose to haul for us. With so many load options, carriers can more easily find loads that decrease operating expenses. This in turn creates more capacity options for shippers that work with C.H. Robinson.

Diesel fuel retail pricing

In their April 11, 2023, Short-Term Energy Outlook, the EIA estimates April 2023 real retail diesel pricing at $4.22/gallon, down from $4.43 in February. For perspective, March 2022 was at $5.37. Finally, in March 2020, the beginning of the pandemic period, diesel was $3.20/gallon.

The report also forecasted December 2023 at $4.09, up from March's forecast of $3.98. Shown is the EIA's forecast for 2023 and into 2024. Continue to watch the pricing of oil and diesel in the wake of the recent OPEC announced production cut (source: Bloomberg).

Routing guide line graph - TMC + C.H. Robinson freight insights 11.17.22

International Roadcheck Week: May 16–18

The annual Roadcheck week across Mexico, Canada, and the United States is scheduled for May 16–18 this year. This three day event is when Commercial Vehicle Safety Administration (CVSA) certified inspectors conduct compliance, enforcement, and educational initiatives targeted at various elements of motor carrier, vehicle, and driver safety. The focus for the 2023 International Roadcheck week will be on anti-lock braking systems (ABS) and cargo securement.

The truckload capacity community has a historical response to the annual Roadcheck week. A small percentage of drivers take vacation. This in effect, reduces the active capacity. This reduction in capacity causes disruption in the spot market and the contract market.

The visual below shows 11 years of DAT dry van spot market LTR leading up to the three Roadcheck days, the three days themselves (indicated as Day1, 2, and 3), and those that follow. The data is broken down by loose and tight years with an 11-year average in blue.

  • The green loose year is an appropriate benchmark for 2023
  • The LTR does increase up to 3.9:1 on Day 2
  • RGD settles back down after the event with Day +5 marking the return to the soft market LTR pattern
Routing guide line graph - TMC + C.H. Robinson freight insights 11.17.22
The impact on route guides from Roadcheck week3

C.H. Robinson commissioned work with MIT's Center for Transportation and Logistics to better understand the impact planned disruptive events have on contract route guide performance. The research concluded that route guides do show some degradation in performance around Roadcheck week, but it is more muted than most scheduled legal holidays. Below are the most helpful insights from the research:

  • Low volume lanes are more prone to tender rejection and backup provider rejections than high volume lanes during Roadcheck days
  • Spot market usage increases as a result of increased route guide failure during Roadcheck
Plan for Roadcheck week

Roadcheck week is a plannable event that presents slight underperformance in route guides, most pronounced in low volume lanes. Most shippers have roughly 80% of their truckload volume in 20% of their lanes.

For those 80% of low volume lanes in route guides or served as direct to spot market, it might be advisable to prioritize shipments and take a proactive stance to ship early or late to minimize the access to capacity and cost impact in the spot market. For 2023, the impact is muted due to the oversupply of capacity situation.

Voice of the carrier from C.H. Robinson

C.H. Robinson has two customer communities, shipper customers and carrier customers. What follows are insights from conversations with carriers of all sizes to offer perspective into their top concerns over the past month. Below is a summary of the reoccurring themes.

Market insights
  • Awarded volumes are key to revenue stability
  • Spot market reliance is problematic with low pricing and less available volume
Equipment insights

All new equipment costs have remarkable increases. A few examples:

  • New tractor costs are up $30k in 2023 over 2022
  • New trailer costs are up with refrigerated trailers now costing over $100,000
  • Parts supply still has some gaps that slow repairs and continue at inflated costs from before the pandemic
Labor insights
  • Mechanic shortages and issues with fleet maintenance continue
  • Drivers are more plentiful, and carriers can be more selective
  • Team drivers continue to be difficult to seat
  • Weekly home strategies are a core strategy for many fleets
  • Pay increases from the pandemic period are holding

A key value proposition of C.H. Robinson to our contract carriers is aggregating lane volume and demand pattern variability to a more predictable experience. C.H. Robinson contract carriers have more predictable volume and as a result are interested and able to offer consistent capacity and market pricing with high performance.

Imports and inland transportation

Places where the global supply chain meets North American supply chains—like ports and airports—are also affected by the cyclical market and other disruptors. Here is a look at top influencers impacting imports in the United States.

Southeast United States:

Port Everglades Terminal:

  • Florida's largest container port will charge a fee starting May 1, 2023, impacting dray drivers not holding a TWIC card

This will not impact C.H. Robinson customers as our contract carriers require drivers to carry TWIC cards


  • Expect to see an increase in driver wait time at the port, chassis split charges, and crosstown fees until the SMART Pool program goes live in May


  • Two year peak volumes have settled
  • Eliminating evening hours
  • Returning to pre-pandemic hours of operation

Northeast United States:
  • Three-hour delays have been experienced in New York and New Jersey as a result of ILUA furloughs causing delays at the terminal gates
  • Warehouse transloading services are plentiful as volumes have slowed

Central/Ohio Valley:


  • Dray driver capacity is high
  • Chassis availability is drastically improved


  • Experiencing a 2–3 hour turn for returning empty containers from intermodal marketing companies (IMCs)


  • No material impact on services


  • Experiencing available capacity and chassis

Kansas City

  • 40ʹ chassis supplies are more available
  • Dwell is down to 30+ days


  • Dray carriers report limited/no chassis available for international containers
  • Chassis need to be retrieved from the Container Port Depot instead of being available at the CSX yard


  • Chassis shortage has Norfolk Southern not mounting containers from the train and charging a $125 lift fee to be paid prior to gate-out


  • No material impact to services

St. Louis

  • Capacity is available
  • Chassis pools are dwelling 20+ days with only 4% availability
West Coast and Gulf:

Port of Los Angeles/Long Beach

  • Continue labor negotiations on a contract that expired in July 2022
  • A dockworker walkout occurred Thursday April 6 and Friday April 7
  • Normal operations resumed Friday evening
  • Slow dispatching of workers was used the following week, with relatively normal vessel throughput
  • Backlog of anchored vessels is no longer an issue

For a full market report on global forwarding, visit the C.H. Robinson Global Freight Market Insights.

Temperature controlled shipping

The temperature controlled marketplace continues its national trend of lower freight volumes, resulting in a competitive capacity marketplace that leads to attractive pricing and readily accessible capacity.

Each year, the regional cycles of produce harvest tend to have a marked impact on both the refrigerated and dry van truckload markets. The following are some early insights on what to expect this fresh produce season.

The harvest in southern Florida looks healthy due to stable weather patterns. But the Salinas Valley in California and Yuma Arizona growing regions could see delayed planting due to recent rains and flooding. Romaine, iceberg lettuce, and strawberries will likely be most affected.

Beyond regional weather impacting planting in the early weeks of the California and Florida growing seasons, predicting fresh produce demand from consumers in 2023 has the added challenge of the current inflation rate influencing how consumers buy. When economic pressure is less influential on the consumer, fresh produce tends to experience high demand that translates into increased demand for refrigerated trucking.

The current economic condition could shift buying behaviors to canned and frozen goods versus fresh due to lower costs and longer shelf life. The canned goods shift to dry van, lessening the demand on refrigerated trucking.

Currently, consumer demand appears to be supporting fresh products and the need for refrigerated trucking. However, the current state of truck capacity supply to freight volume demand suggests the refrigerated transport experience to be manageable and likely without too much disruption due to produce harvest transport.


Of the three primary truckload services (van, refrigerated, and flatbed), flatbed demonstrates the greatest capacity opportunity with the spot market LTR level patterning below five-year averages.

High-quality service

Service levels are a top focus for all participants in the flatbed services space. In today's market, high service and aggressive pricing are both available.

Situational tightness
  • Alabama, Mississippi, Texas, and Illinois have had some recent capacity tension common with March and April
  • Savanah, GA, Baltimore, MD, and other port cities have some increased volumes, but not to the point of constrained access to capacity
  • Southeast markets have some strength in housing construction goods volume
  • Great lakes region has seen increased volume around steel production
Infrastructure and construction

Beneficial cargo owners report planned projects, leading to some optimism for the latter half of 2023.

Flatbed supply

Capacity in the flatbed segment seems to be experiencing only isolated carrier closures. There is increased reporting of smaller carriers signing on with larger carriers so they are able to keep running.

The flatbed market, while well below five-year averages for spot market LTR, has some optimism, keeping trucks moving while also able to offer high service at very good pricing.

Cross-border shipping: Canada

Canadian Government Labor Negotiation Update
A strike is currently affecting various Canadian Government employees and services of Canadian federal public servants under the Public Service Alliance of Canada (PSAC) and Union of Taxation employees. The Canada Border Services Agency (CBSA) has advised it expects that CBSA services to travelers and businesses will be maintained throughout the strike, but will update the public if services change. Please refer to our client advisory page for the most updated information.

Cross-border capacity and intra-Canada capacity are readily available
The Canadian for-hire truckload market is comparable the U.S. market. Capacity is plentiful broadly for north and southbound cross-border and intra-Canada freight.

Route guides for contract/awarded freight are performing well. As a result, the spot market freight is largely freight that is best served there rather than freight from route guide failure that migrates the spot market seeking capacity.

Despite an imbalance in north and southbound cross-border freight flows, all corridors are performing rather well, and pricing has dropped to levels not seen in recent years.

U.S. vaccine mandate for crossing into the United States from Canada will be lifted May 12.

This week, President Joe Biden ended the national COVID-19 state of emergency earlier than scheduled. The public health emergency mandate, which does not allow unvaccinated non-U.S. citizens to enter the country, remains in place until May 11. Source: Truck News.

The Canadian Trucking Alliance as well as the American Trucking Association have called on the U.S. government to remove the vaccine mandate, stating the mandate has barred thousands of unvaccinated truck drivers in Canada from entering the U.S.

Cross-border shipping: Mexico

Nearshoring in Mexico continues to accelerate

Mexico is set to be one the biggest beneficiaries in the Latin America (LATAM) region according the Inter-American Development Bank.

Growth of manufacturing, especially in the state of Nuevo Leon, is readily present in Mexico. Tijuana, Laredo, and El Paso, TX, serve as examples of cross-border investment in warehousing to support the evolution of supply chains. The auto industry is already experiencing growth with both personal and heavy-duty vehicles.

Mexico-U.S. cross-border capacity

The general capacity situation is unchanged through Q1 2023. Northbound load volumes continues to exceed southbound by 3:1.

The growing northbound volume is attracting both Mexico and U.S. carriers, creating capacity opportunities. At the same time, the healthy demand pattern of loads is pressing up on market pricing with April starting to experience some increases over Q1.

Additionally, drivers with B1 Visas continue to migrate from cross-border transfer services to longer haul moves as the opportunity continues to grow, creating some cross-border shuttle capacity challenges.

Warehouse and trailer capacity

Warehouse capacity at the border is about 1%, forcing storage into trailers, which is now creating some cross-border capacity challenges due to fewer trailers in rotation for the actual cross-border moves.

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Intermodal Shipping

TOP STORY: Volume commitments unlock historically challenging markets

Improved performance

Intermodal volumes continue to decline Y/Y. Lower volumes create opportunity for improved performance as seen in faster train speeds, consistency in transit times, and sustainable capacity solutions.

The rails are running above five-year average rail speeds. Forecasts for North American domestic shipments are projected to make up some ground thorough the year to end flat Y/Y. Meanwhile international moves are forecasted to finish down ~10% Y/Y.

Pricing opportunities

Pricing continues to trend down as rail pricing tends to lag truck pricing four to six weeks and is now near 30% lower Y/Y. Due to the longer transit time for intermodal versus truckload, intermodal pricing tends to move to levels below trucking in recognition of the slower service.

Competing service to truckload

Consider expedited service options to compete with truck transit time in many lanes. The rails are now receptive to all opportunities with an emphasis on larger volume and multi-year commitments. Container capacity is plentiful across the network and rails are offering discounts even in some historically deficit markets.

Now is the time to build your capacity with the rails for when the market swings up.

Less Than Truckload (LTL) Shipping

TOP STORY: Pricing discipline continues amid lower tonnage

There are hints of LTL tonnage being down ahead of Q1 published results. While many reports from public LTL carriers for January, February, and hints from March suggest LTL volume and tonnage is down, pricing discipline continues as volumes are aligning with available capacity, and carriers choose the freight that creates the greatest value.

Active research C.H. Robinson commissioned with MIT's Center for Transportation and Logistics reveals a correlation between the truckload spot market and LTL freight volumes. This positive correlation suggests that as spot market pricing increases, some freight migrates from truckload to LTL and as spot market truckload pricing declines, some LTL freight migrates back to truckload. The anecdotal industry conversation from the LTL carrier community seems to align with these early research insights.

Softer demand in LTL and parcel creates some excess capacity, but unlike truckload, these carriers need a certain level of extra capacity or "elasticity" in their networks to perform at optimum service levels.

As such, the industry is simply getting to a level of balance that is closer to optimal rather than oversupplied and are pricing simply to create freight volume.

Overview of the current LTL market experience

  • Capacity is readily available
  • Carriers seek easy to manage freight
  • Expect more efficient digital process relationships
  • Accessorial charges for overdimensional freight are common
  • Some carriers continue location embargoes due to long dwell times at shippers and consignees

When engaging the LTL market for new pricing, be mindful of your freight portfolio and consider how both attractive and undesirable shipments are presented to the carrier community to ensure the best outcomes.

Small Parcel

FedEx to combine its ground and express networks
The completion of a merger between ground and express service offerings from FedEx is expected June 2024. This blending of services historically has been a notable difference between FedEx and UPS, where a FedEx customer needs to separate ground from express shipments, a UPS customer does not. Source: Supply Chain Dive

This change is rather fundamental to FedEx as the ground services are staffed with independent contractors, truck assets, and staff, while express has FedEx employees and planes.

Many reasons have been cited for the significant change at FedEx, most relate specifically to cost cutting measures. The ecommerce surge in recent years and elevated costs related to delivering packages to homes pushed FedEx into bringing these operations closer together to avoid the duplication across the separate divisions.

In its current state, both ground and express trucks were moving packages in the same neighborhood, causing confusion for customers and higher costs for FedEx. Customer service will also improve as customers currently have to deal with pricing and dispatch windows for ground and express separately.

The biggest benefit to FedEx shippers will be they no longer have to worry about juggling separate pickups or contract terms between ground and express. So, if your objection to moving over to FedEx from UPS was having to separate your ground and express packages, that will be changing very soon.

1. Grace Caza, Varun Shekhar, Angi Acocella, PhD and Chris Caplice, PhD, MIT's Center for Transportation and Logistics, “Managing Disruptions: Understanding Shipper Routing Guide Performance,” 2022.
2. Nishitha Aemireddy, Xiyang Yuan and Chris Caplice, PhD, MIT's Center for Transportation and Logistics “Root Cause Analysis and Impact of Unplanned Procurement on Truckload Transportation Costs,” 2019.
3. Grace Caza, Varun Shekhar, Angi Acocella, PhD and Chris Caplice, PhD, MIT's Center for Transportation and Logistics, “Managing Disruptions: Understanding Shipper Routing Guide Performance” 2022.

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