Increase in Shipping Rates
Shippers should expect the price increases experienced in Q4 2020 and Q1 2021 to continue throughout 2021. For smaller, consolidated consignments we can expect to see rate increases in the 5-8% range. Shippers with big and bulky shipments, should expect freight rates to increase to 5-10%.
Among some of the key factors behind these anticipated shipping rate increases are :
Driver Shortage.
This will most likely impact transport capacity in 2021 and going into 2022. When a driver gets a positive COVID-19 test, the carrier’s depot may be shut down for safety measures, removing capacity from an already challenged market. Carriers anticipate this will continue to impact capacity until vaccines are widely available throughout the world.
Also, the average age of many freight drivers is in the mid 50’s and older. Many drivers took early retirement due to the COVID-19 risk factor, and those drivers haven’t been replaced. Carriers and freight handlers are tackling the driver shortage with job training programs that target younger drivers and to transition dockside workers to vehicle drivers. While these are positive steps, they are not likely to adequately staff a national or international driver pool just yet.
Surging E-Commerce Orders
This will cause Shipping Rates To Increase in 2021. Like many industry sectors, many carriers underestimated the e-commerce boom resulting from the COVID protocols. In response, carriers are investing in vehicles with lift gates for smaller businesses premises and residential deliveries.
Smaller Freight Volumes Will Remain Volatile in 2021
Carriers faced a whiplash effect through the year as they struggled due to low volumes during the height of COVID-19 shutdowns. However, volumes are extremely high now, and carriers are struggling to keep up. Volumes are expected to continue increasing through 2021 at least and if strict shutdowns return, volumes could drop if many shippers are forced to close. Or, they may well spike again in response to higher consumer demand.