We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • ::COVID-19 COVERAGE::
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
Home » Freight sector to gain momentum in 2015 following strong 2014, top analyst predicts
newsworthy

Freight sector to gain momentum in 2015 following strong 2014, top analyst predicts

January 15, 2015
Mark B. Solomon
No Comments

The U.S. freight industry, coming off its best year since 2007, is poised to perform even better in 2015, a trend that bodes well for carriers but not for users facing higher rates and scarcer capacity especially in trucking services, according to the author of a monthly index that tracks shipment and spending activity.

Rosalyn Wilson, who writes the analysis for the index, which is published by payment and auditing firm Cass Information Systems, said in a report issued today that volumes and carrier revenues "will grow steadily" this year, leading to fatter margins for carriers whose profits have been squeezed in recent years by historically subpar demand and by escalating costs. Shippers, however, should brace themselves for continued rate increases as freight demand exceeds supply, particularly in trucking, Wilson said. Truck users will pay more for guaranteed capacity, and truck space may not be available at any price during the year's peak shipping periods, she predicted.

While truck demand has increased, it is still not back to levels recorded prior to 2006, when a prolonged freight recession began, she said. However, carrier costs are much higher today than they were back then. Truckers will act to rectify that imbalance through rate hikes. In turn, consumers will face higher prices for their goods as shippers pass on those rate increases, she added.

Wilson, who also writes the annual "State of Logistics Report," said in an e-mail today that she expects the 2015 report, which is scheduled to be released in June, to follow a similar narrative. Wilson had forecast in the previous report that 2014 would be the freight sector's best year in the past seven or eight.

The good news, overall, is that, after several years of dormancy, the industry began to re-invest heavily into improving its operations last year, Wilson said. The result, she said, is that the supply chain is poised to expand and that its nodes are adapting to dynamic situations "more rapidly than we have seen in a decade." The railroad industry, which has been plagued by erratic service for more than a year due to bad weather, spikes in demand, and inadequate capacity on key traffic lanes, should improve its performance in 2015 as multibillion dollar investments in equipment, infrastructure, and labor begin to have an impact, she said.

In December, shipment volumes measured by the Cass index fell 6.3 percent from November levels, while shipper freight expenditures declined sequentially by 6.7 percent. Those declines mirrored a decline in December retail sales, which led to a drop in demand, inventories, and the cost of moving and carrying goods, according to the index. Freight expenses also dropped in December due to the rapid and dramatic fall in fuel prices.

Despite the December declines, overall volumes and expenditures hit their highest year-end levels since 2007, considered the start of the Great Recession, according to data from the index.

December 2014 volumes were 4 percent higher than in the same period in 2013, while expenditures were 3.6 percent higher year over year, according to the report.

The monthly data are based on the $22 billion in annual freight payables that Cass processes on behalf of its clients.

Transportation Trucking Rail
KEYWORDS Cass Information Systems
  • Related Articles

    Analyst says truckload contract rate hikes could easily exceed 4 to 6 percent in 2014

    "State of Logistics Report" predicts bullish freight demand for 2014

    Cass shipment, expenditure indexes turn up in January; freight recession over, analyst says

Marksolomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

Recent Articles by Mark Solomon

Coming together for road safety: interview with Joshua Girard

Off the rails

Freight rate spikes shaking up the C-suite

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Relaxed regulations for drone parcel delivery to take effect in March

  • IBM survey says digitalization trends will sweep trucking industry by 2030

  • Gartner survey signals increased investment in resilience over the next two years

  • What Level of Automation is Right for Your Warehouse?

  • Old Dominion adds nine freight service centers to handle business growth

Now Playing on DCV-TV

D92f0dd1 a98c 434a 9e17 30b63ee72c90

Automated Pack-out and Print-Apply System for thredUP

DCV-TV 4: Viewer Contributed
SilMan Industries designed and implemented a mixed polybag-carton system, including automated print and apply, in a new regional Fulfillment Center for thredUP, one of the world’s largest online resale platforms for women’s and kids’ apparel, shoes, and accessories. The Situation Secondhand clothing and online...

FEATURED WHITE PAPERS

  • Time to rethink your lift truck power

  • Warehouse Management System Project Toolkit

  • Solving Talent Management Challenges Now and In the Future

  • Shaping Up Last Mile Delivery to Surpass Customer Expectations

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2021. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing