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U.S. freight rates rose 28% year-over-year but fell nearly 2% month-over-month in July, a possible sign that the U.S. market has peaked, according to Cass Freight’s July report, just as the period cutting edge shipping that covers both back -Back to school and the holidays begin.
“We’re coming into this peak season with a lot more spare capacity. I think that’s going to be good from a cost perspective for those big retailers that have been struggling with a lot of cost inflation,” Cass Freight researcher and report author Tim Denoyer told the CNBC.
CNBC got a first look at data compiled by Cass Information Systems looking at prices and shipments in the North American market.
Shipments of goods handled by companies rose 0.4 percent year-on-year, the report said, but fell nearly 2 percent month-on-month.
“The balance of the market has really shifted. It’s stable from a demand perspective, but supply has increased,” Denoyer said.
Even with shipping trends leveling off, demand remains elevated relative to pre-pandemic levels, and U.S. logistics companies, especially trucking companies, should continue to have strong pricing power, according to Denoyer. The Covid crisis has driven many independent truckers out of the industry, and in 2021, the American Trucking Association released a report that found the country’s truck shortage reached a record 80,000.
This report also found that 1,000,000 new truckers would be needed over the next decade to maintain current levels.
The sale price of a used Class 8 truck (the tractor of a tractor-trailer) has doubled since 2019, according to ACT Research figures. Denoyer says this has been a factor preventing new companies and drivers from entering trucking and will continue to affect the balance of freight supply and demand.
“Truck prices in the U.S. have become a significant barrier to entry. I think that’s going to continue, and that’s been a big factor in capacity,” he said.
