TD Cowen/AFS: shippers should buckle up for an expensive Q4

Freight rates are being driven to historic highs by the potent effects of a structurally higher-cost transportation environment, heated up by entrenched high fuel prices, capacity constraints, and peak-related fees, according to a report from AFS Logistics and TD Cowen.

The report projects an expensive Q4, with holiday shippers facing record-high ground and express parcel costs, the highest truckload rates since Q1 2022, and LTL rates eclipsing 80% above the January 2018 baseline for the first time ever.

Those are the results of the “TD Cowen/AFS Freight Index,” a snapshot with predictive pricing for truckload, less-than-truckload (LTL), and parcel transportation markets.

“We expect fuel to drive elevated transportation costs for the foreseeable future. Inventories are low and refineries are at capacity, so even if crude oil prices drop in the coming months, diesel and jet fuel supplies must still catch up before prices recede,” says Andy Dyer, CEO, AFS Logistics. “The other key force shaping freight markets is capacity. The holiday rush always places a seasonal premium on parcel capacity, while the continued ascent of truckload rates is the result of steady demand chasing a shrinking pool of trucks.”

This story was originally published by Supply Chain Quarterly. Read the full story at Supply Chain Quarterly →