Available Capacity, Stable Rates Among Shipper Expectations for Next 12 Months

The next 12 months could be shaping up well for shippers with looser freight capacity and carriers looking to strengthen their transportation contracts with key partners. There also remains intense interest in utilizing electric or alternative energy vehicles among shippers.

Those are a few of the highlights from a new report from Breakthrough.

Breakthrough, which provides data, technology and market solutions for transportation networks covering over $25 billion in annual freight spend, surveyed 500 transportation decision-makers (350 shippers, 150 carriers) in the U.S. to measure their goals, priorities and predictions for the next 12 months. The survey was conducted March 8-23 and results compiled into the 2023 State of Transportation Report.

“Transportation leaders are facing mounting pressure to reduce costs and emissions in freight operations. Volatile fuel prices, capacity fluxes, and other macroeconomic challenges are on the minds of industry leaders who are still reeling from the disruption of the last few years,” the report notes. “All of this is happening as transportation teams are working to regain sustainability progress that was eroded by the pandemic, which forced a three-year delay in emissions reduction action. But now, network priorities have shifted, and leaders must recalibrate their strategies to adapt to the new market balance.”

Available freight capacity

Among the results, 59% of transportation leaders predict freight capacity will be more available over the next 12 months, and 70% say strengthening their contracts with current partners is a key focus area.

The leaders agree overwhelmingly (94%) that consumer demand for more sustainable products is increasing, making efforts to reduce emissions a priority. Of shippers surveyed, 99% agree that they would take advantage of electric or alternative vehicles if carriers offered them.

Despite this interest, only 59% of carriers expect to add EVs to their fleets in 2023.

“Despite the widespread interest in EVs, the majority of carriers are still in the pilot phase of adoption, meaning loads moved on EV equipment will be minimal in the immediate future. It will take time for them to test EV capabilities and collect real-world data on ownership and usage costs before expanding their fleets,” the report notes.

Higher rates

On the rate front, there doesn’t appear to be much optimism for lower rates despite increased capacity. Nearly two-thirds (63%) of respondents expect linehaul rates to remain higher than average over the next 12 months. Volatile diesel fuel prices, cited by 51%, is the top concern, followed by limited freight capacity (37%) and driver shortages (36%).

The good news? Most leaders agree they have the right tools (97%), partnerships (96%) and staff (92%) to navigate any transportation challenges in 2023.

Among the top priorities for transportation teams is establishing relationships with new partners to increase efficiencies (50%), reducing internal silos (33%), reducing emissions (33%), consolidating vendors (29%), correcting lane-level disruptions more quickly (26%), uncovering fuel-saving opportunities (25%) and inbound/outbound lane optimization (12%).

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