Freight transportation prices fall at fastest pace on record

Transportation capacity is up, and trucking prices are falling fast.

Bobby Dalheim //Senior Editor of Case Goods and Global Sourcing//December 3, 2022

HIGH POINT – Transportation capacity is up, and prices are falling fast.

The Logistics Managers’ Index, a monthly survey of supply chain executives, gave a transportation capacity reading of 71.4 for November. This was less than two percentage points lower than October’s reading, which was the highest seen in six years. The higher the number, the more capacity is available.

The transportation prices sub-index came in at 37.4, a reading 4.8 points lower than October. The report called it “the sharpest rate of contraction we have read in the history of the LMI.” Prices are expected to decline further.

“The future index for Transportation Prices continues to slide below the critical 50.0 level, now indicating expectations of further decreasing transportation prices for the next year,” reads the report.

This could be good news for furniture suppliers, who have voiced their concerns, particularly about inland freight.

“Trucking companies continue to have more power than we would like,” said Jim O’Keefe, vice president of sales for Hekman Furniture. “I’m waiting for the pendulum to swing in our favor. It always seems like a conspiracy of factors: Driver shortage, diesel prices, etc. But I see a reduction in demand for consumer goods, which could lower demand for inland freight. Hopefully that will lead to better pricing, but we’re not seeing that yet, especially going to the upper Northwest.”

Delays have also been an issue.

“There’s some difficulty in managing (inland freight), particularly with it getting stuck in hubs,” said Micah Swick, president of case goods importer Bernards Furniture. “It’s taking longer to get product. Purely speculating, I think it’s a staffing issue. Everyone is working too hard and too thin.

Other furniture manufacturers and importers who’ve said trucking is an obstacle include American Woodcrafters, Century Furniture, Legends Furniture, Gat Creek, A.R.T. and Martin Furniture.

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