July 2023 Freight Market Shipping Trends

As we officially enter summer, tides are starting to shift within the freight market and seasonal shipping trends are ramping up.Shippers and carriers alike can make informed business decisions and maintain profit by understanding the predicted rates and making a plan for peak season booms.

Current state of the freight market.

Despite an increasingly challenging economy, consumers are, so far, hanging in there – with spending in the first quarter of 2023 showing a year-over-year growth rate of 2.3%. Higher spending than last year is a favorable sign for future truckload capacity demand. So although the economy continues to limp along and there may be some potential challenges, particularly in regards to contract rates, there is plenty to be optimistic about in the freight market.Spot rates.With the US Spot Rate TL Linehaul Index remaining unchanged compared to last month’s read, we can confidently say that Q1 2023 was the market cycle bottom. Recovery of the spot rate market has officially begun.Rates are forecasted to sit roughly 5% higher in Q4 2023 than they were at the end of 2022 then rise even further come 2024. Expect the ride to be choppy at times, but giddy up nonetheless.Contract rates.While we aren’t seeing anything that screams ‘imminent freight recession,’ the contract TL linehaul rate index (Cass Linehaul) opened up Q2 2023 lower than forecasted, meaning that contract rates likely won’t hit their lowest until later this year.

Impact on shippers.

With spot rates still relatively low as they just start to flip and contract rates likely to keep dropping, these next few months are a sweet spot for shippers – before both rates really turn towards carrier favor in mid 2024.Shippers should consider using spot rates for a bit longer while they’re still fairly low then start securing more contract rates towards late 2023 before they start to rise.

Impact on carriers.

Carriers who mainly utilize the contract market may face a more challenging rest of 2023 as these rates continue to drop. But as spot rates rise through the rest of the year and continue to get even more lucrative throughout 2024, carriers should consider turning to them to fill in any gaps in profit.With both rates flipping towards carrier favor by early next year, either type of rate is likely to be beneficial for carriers come mid 2024. So, carriers, hold tight. You’re almost there.

Seasonal shipping trends.

As we detailed in our June 2023 shipping trends issue, the food and beverage (F&B) shipping industry sees excessively high demand in the summer. Joining F&B’s summertime boom is online, or ecommerce, retail shipping surrounding the 4th of July, travel, and school.

4th of July.

As a significant U.S. holiday, barbeques and parties abound over the 4th of July holiday and surrounding weekend – creating an increase in demand not only for food and beverage but for:

• recreation equipment like pool supplies, camping gear and apparel, and sporting goods
• cooking appliances, especially grills
• outdoor furniture
• party supplies
• fireworks

Summer travel.

With good weather and kids out of school, for many, summertime means vacation time, leading to an increase in purchases such as:

• luggage, including backpacks, toiletry bags, and packing organizers
• travel accessories such as pillows and locks
• portable electronics, chargers, and adapters
• vacation clothing, including swimwear
• beach accessories like sunscreen, towels, and sunglasses

Back to school.

Come midsummer as students and parents start prepping for the new school year, retailers should prepare for a surge in:

• school supplies and paper products, such as notebooks
• clothing for children and young adults
• electronics, including tablets, laptops, calculators, hard drives, and more

Tips for ecommerce retail shipping.

While online shopping was already steadily growing in popularity before the pandemic, COVID-19 rapidly accelerated its adoption. In 2022 alone, Americans shipped 21.5 billion parcels — equating to 65 parcels for every person in the country.Since it’s expected that many consumers will order their 4th of July, summer, and back-to-school goods via ecommerce platforms, online retailers should ensure their ecommerce shipping operations run as efficiently as possible. Some areas to consider include:Inventory management.Prevent overselling by implementing real-time inventory tracking systems, and coordinate with suppliers to ensure timely stock replenishment.Optimal packaging.Efficient packing minimizes wasted space and reduces weight – often equating to lower prices – plus protects goods from rushed handling-related damage and associated costs.Scaleable fulfillment.Optimize order picking, packing, and shipping workflows, plan for appropriate staffing levels, and consider outsourcing to third parties, if needed.Carrier diversification.Using a mix of carriers mitigates the risk of capacity constraints and service disruptions while offering more flexibility around cost and transit time.Retail-specific resources.As retail shipping experts who move 1,000s of loads to major ecommerce centers every day, we put together industry-specific insights so shippers can gain actionable advice topics like:

• retail consolidation
• high-value electronics insurance
• wholesale distribution
• and more

Maximize your bottom line with Flock.

Whether you’re a shipper or a carrier, our one-of-a-kind shared truckloads (STL) can boost your profits while minimizing peak-season stress.Using cutting-edge, patented freight technology, STL efficiently pools compatible shipments from multiple shippers to send fuller trucks on faster, safer hubless routes – simultaneously cutting shippers costs while earning carriers more.Shippers.By only paying for the truck space you need, STL cuts your costs by up to 20% per shipment compared to traditional modes. And, with STL moving your goods on optimized, terminal-free routes, you deliver on time and 99.8% damage-free – saving you $100,000s in OTIF fees. Ready to learn how Flock can benefit your shipping operation? Request a demo.Carriers.Combining shipments from multiple shippers to fill your entire trailer space utilizes every linear foot of your trailer capacity, so you earn up to 25% more per haul.Plus, when you work with Flock, higher-paying freight finds you. With personalized load recommendations and instant notifications on preferred loads, you can finally stop wasting time scrolling through load boards and book better loads faster.Sign up to haul with Flock today.