Freight shippers of all kinds are well aware that their shipping rates are going through the roof.  Fuel surcharges are continually on the rise, and there seems to be no end in sight. Whether a person is shipping LTL, Truckload (TL), rail, or ocean freight, everybody is getting hit by higher fuel costs.  For a while, businesses tried to hold off passing on those costs to their customers, but they can’t do that any longer because the fuel costs are just too high.

And now, “official” confirmation that logistics and freight costs are out of hand.  According to a recent National Logistics Report, US companies spent over $1.3 trillion in freight and logistics spending during 2007. This accounted for over 10% of the US GDP.  This is a significant increase from 2006, where the figure was around 9.8%. 

Broken down into groupings, freight trucking (over the road motor carriage) constituted approximately $670 billion of this total, and almost 80% of the total transport costs. For typical freight shippers, LTL freight and Truckload freight company costs rose over 6% from 2006 to 2007. Other modes, such as intermodal, rail, and ocean freight saw increased costs of almost 7%.

The economic pressures affecting freight shipping do not appear to be changing over the near term. Fuel prices for diesel will likely continue to climb. What this means for freight shippers is that they need to discover new strategies to reduce freight rates and shipping costs. Optimum strategies include securing freight quotes from larger freight pools, such as those operated by Freightclick.com. 

This entry was posted on Thursday, June 26th, 2008 at 4:55 am and is filed under Freight-USA. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.