ILMA Compoundings - July 2019 - 16

INDUSTRY RUNDOWN

Market Report
5 Truckload Shipping Trends For 2019
By Steve Raetz
Our industry's cyclical pattern of tension and slack has
become familiar to many of us. To get a sense of how
we might experience the truckload and less than truckload (LTL) markets through 2019, it is helpful to follow
both supply and demand influences. Below are five key
factors influencing the 2019 truckload freight markets.
DEMAND INFLUENCES
Freight tonnage and volume are good, not great
Recent reports by analysts such as the Cass Information
Systems Freight Index and American Trucking Associations'
For-Hire LTL and TL Loads volume show a comparable year of
volume and tonnage to years prior to 2018. These sources show
that the freight market volumes are healthy when we look at the
portfolio of recent years. 2018 was such an exceptional freight
year. That makes year over year comparable perspectives concerning. Freight volumes are forecasted to continue to expand
in 2019, just at muted rates compared to 2018.

SUPPLY INFLUENCES

Pricing will continue to reflect the attributes of the
freight versus undisciplined pricing simply to capture
volume. Even in a market of parity, carriers continue to
strategically accept the freight that allows them to have
more revenue-generating miles and hours because this
leads to more loads per truck (essentially creating capacity),
greater pay for drivers (if they're paid per mile) and, ultimately, a higher profit. The publicly traded truck lines often
site strategies to grow dedicated fleets and pull capacity
from the spot and irregular route markets.
Technology is helping carriers with pricing, freight acceptance, yield and, ultimately, driver pay and retention. Expect
continued discipline from the carrier community.

Carriers accept freight strategically
While today's truckload and LTL shipping markets show
carriers are more accepting of less than optimal freight and
lanes, carriers are still strategically selecting and accepting
freight. LTL carriers continue to leverage dimensionalizers as
they work to attain high yields with challenging freight characteristics and growing demand of large-format e-commerce.

Truckload fleets have grown and could continue to do so
While it's hard to discern exactly how much more capacity is
available today, various reports all support the idea that both
trucking jobs and real capacity have increased.
2018 new truckload tractors and trailers was strong.
Equipment manufacturers are largely booked for production
in 2019. The American Trucking Associations recently

Global trade and economy matters
Analysts studying the freight markets continually cite the
influence that trade and global economies have on the freight
markets. Uncertainty influences investment, and freight is typically a derivative of investment. Keep an eye on the unfolding
trade situations with China and USMCA. The resolution
of these are often presented as boosts or drags on freight.
The slowing global economy is increasingly discussed as an
element that is slowing freight economy by many analysts.

JULY 2019

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ILMA Compoundings - July 2019

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