What is happening: Growth in trucking freight has kept the pricing power in the hands of carriers.
Growth: Although shipments and expenditures fell in October, the year-on-year growth remained healthy. This has kept the pricing power firmly in the hands of the carriers. As long as demand exceeds supply, freight providers will have the power.
Numbers: Shipments rose by 6.2% compared to October last year. Expenditures grew 12% year-on-year.
Technology: Cass Freight Index believe technology will keep the extended growth from causing long-term inflation.
Inflation: For the first time since 2011, supply chain managers are now contending with inflation again. This comes after years of flat costs and rising margins.
Transport: Rising transportation costs have been a big issue this year.
What did founder and managing partner of Broughton Capital, David Broughton say: “To the extent that pricing is materially exceeding the marginal cost of creating that capacity, market participants are investing heavily in the exact activities which kill pricing power in commodity markets.”