As you might imagine, the past 18 months have been a busy stretch for the shipping industry. With millions of people around the country spending more time at home and opting for delivery instead of in-person shopping, the importance of reliable freight has never been higher.
Across the market, shipping providers have been stressed to the brink of breaking under the added demand, with some companies even freezing new orders altogether. These conditions unavoidably affect the rates for ground freight. In fact, rates for shipping Full Truckload and LTL increased roughly 11% from October 2020 to July 2021. Here are some of the main drivers of that rise.
1. Rising Fuel Costs
The U.S. has seen several bumps in fuel prices in the last few years, which have put even more stress on the already strapped shipping industry. As of this month, diesel fuel prices have reached their highest price point in seven years, signaling an increase of almost 50% in the past 12 months.
2. Labor Considerations
Many workers in the U.S. have changed careers or exited the labor force during the pandemic, and this colossal shift has led to driver and handler shortages in shipping. With fewer workers, companies have had to increase wages and incentives to entice new hires, which causes the price of shipping to rise.
3. Port Congestion
Some ground freight involves shipping items that have recently arrived at ports from overseas. In the past year, ports have become increasingly congested as ocean freight has experienced major delays. The end-to-end shipping time from China to the U.S. has increased from 50 to 73 days in the past year, and these delays have in turn made ground freight more difficult to manage.
4. Outright Demand
People are shipping more than ever as young families purchase houses and cars in the highest numbers since 2008. The average consumer’s propensity to order goods online and have them shipped has caused a demand surge in practically every consumer-centric sector; and when demand rises, so do prices.
The boon in ground freight shows no signs of slowing, and demand is forecasted to remain strong through the busy holiday season and into 2022. For now, shipping providers and carriers can expect this level of elevated volumes to continue for the foreseeable future.
GW Transportation: Your Freight Partner
In this turbulent time, shipping freight can be a tricky (and expensive endeavor). With costs rising, there is a stronger need than ever for a provider that can deliver specialized loads quickly, smoothly, and on time. That’s where GW comes in.
At GW, we strive to be the most personable and responsive logistics provider in the transportation industry – and we do not take that claim lightly. We source worry-free transportation solutions for our clients and carriers, and our dedicated staff specializes in solving unique transportation problems.
When it comes to your shipment, trust the professionals at GW Transportation. We make sure to establish clear communication for peace of mind throughut the shipping process. To learn more about our service offering and to get in touch, visit our website or give us a call at 877-260-1595 today.