The team at GW Transportation Services published an article in the fall of 2021 detailing the pressures on the freight industry. In a strapped market, ground freight is charged with elevated demand while battling certain supply-side pressures. This has led to a general rise in freight rates in the past year.

As we step fully into 2022, we can expect many of the same factors to continue to influence the industry in a meaningful way. With large-scale consumer demand driving shipping contracts, and a tight labor market with extremely low unemployment, shipping and logistics providers will need to be nimble and effective to meet their delivery schedules this year.

The Market Outlook

According to a recent synopsis by the Wall Street Journal, “inflationary pressure driven by strong demand and tight capacity in freight markets is likely to persist” in the freight industry. With these dual forces at play, many shipping providers have leverage to increase costs to make deliveries, and many have.

From 2020 to now, the cost of shipping goods via truck and railway has increased by an average of 23%. In bidding for contracts, providers are more often looking for larger fees as the market generally justifies them.

It’s important to note that despite the outsized demand and supply-chain constraints, some of the price increases forecasted in 2022 are also due to inflation. With average prices of nearly every good rising at the highest rates in decades, we can expect freight rates to do the same as part of an inflationary economy.

Continued Pressure

The aforementioned pressures on the freight industry may be receding slightly this year, but still loom large. Fuel prices are elevated, ports are congested, pandemic-spooked buyers still prefer delivery goods, and the labor market is as tight as ever. As business expands at a pace that surpasses the growth of the labor force, vacancies will continue to plague many shipping and logistics providers.

The added workload to existing workers has resulted in salary increases for many shipping professionals across the industry, especially warehouse workers and truckers. These increased costs for shipping businesses often translate to higher freight rates.

An additional pressure that is emerging in 2022 is warehouse rents. As freight operations expand in scale and new providers emerge, the demand for adequate storage space has spiked. This has led many landlords or dockyards and warehouses to up their monthly rent, forcing freight providers into shorter leases at increased costs, which in turn also drives up freight rates.

Finding Affordable Solutions in 2022

Crafting a freight solution in this volatile and dynamic market requires extreme versatility and innovation. At GW Transportation, we specialize in customized freight solutions that meet the unique needs of our clients’ load specifications, budgets, and timelines.

Working with a logistics provider that has a network of reliable shipping partners at their disposal can help you get your shipment safely from A to B – on time. As the market continues to change and grow, expertise in the logistics space will be worth its weight in gold.

GW Transportation: Your Freight Partner

There has never been a stronger need for a logistics provider that can deliver specialized loads quickly, smoothly, and promptly. That’s where GW comes in.

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 every day, and our dedicated staff specializes in solving unique transportation problems around the clock.

When it comes to your shipment, trust the professionals at GW Transportation Services. We make sure to establish clear communication for peace of mind throughout the shipping process – even in a changing market. 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.