Logistically Speaking: A 2020 Outlook by David Underwood

DAVID UNDERWOOD | JOURNAL OF COMMERCE
Senior Vice President, Logistics Operations, Dunavant Logistics Group LLC

January 3, 2020

As we enter 2020, pricing transparency is more apparent than ever, whether through robust indexes or industry resources. Capital investment in technology remains an industry trend for carriers of all sizes, and thus data will continue to become more automated and readily available for forecasting.

Fairly flat rates are the expectation of 2020, particularly compared to a history of a noticeable jump in rates in 2018 and a noticeable dip in 2019. Today, across multimodal, we do not see a shortage of drivers but rather a shortage of supply. However, any type of geopolitical event or natural disaster could impact capacity in a moment’s time. External variables such as tariffs and the presidential election can influence the industry’s trajectory, but to what extent is not known, posing yet another variable.

We believe the dynamic between spot and contract will always exist. The power lies within the ability and fortitude of the carrier to navigate variables and predict the future in order to increase business under contract. The nature of this industry, however, dictates that demand for spot business will continue.

However, the intersection between a continued evolution of e-commerce, ELDs, and the potential of more merger and acquisition activity in a fragmented market, will continue to be the dominant topic of discussion this year.

All in all, we are equipped to navigate and operate under the assumption of flat rates in 2020 with, of course, the disclaimer that external variables could incur a bumpy ride.