Less than truckload (LTL) carriers have increased their rates in recent months despite a trend toward lower average weight per shipment that was likely caused by a broad shift from brick and mortar retail to e-commerce, according to a freight sector analysis from the investment bank Cowen Inc. and logistics provider AFS Logistics LLC.
Although they’re moving less weight in each parcel, the carriers have hiked their rates to cope with other factors such as labor shortages and capacity restraints, the companies said in their Cowen/AFS Freight Index. The quarterly index, launched today, was designed to provide Cowen’s institutional clients with predictive pricing tools for the freight industry, including performance snapshots of LTL shipping, full truckload (TL) shipping, and parcel shipping (both express and ground, separately).
Other trends tracked in the latest edition of the index include a forecast for LTL rate per pound to continue growing in the fourth quarter, truckload rates per mile to continue growing through the end of 2021, and ground parcel rates per package to increase 16.9% in the fourth quarter.
“Freight is a rapidly changing industry and the ability to track its performance has become a critical component of the investment process for our clients. There is strong demand for tools to accurately monitor and predict sector trends,” Jason Seidl, Cowen’s senior analyst for Airfreight & Surface Transportation, said in a release. “Using applied machine learning, data science, and the annual transportation spend at AFS since 2018 to give a strong picture of the overall market, the Freight Index currently forecasts, among other things, that we should see the TL rate market reach a new high in the fourth quarter of 2021, with LTL rates expected to grow at an even larger clip.”
