navitor.com 12 Small Package Outlook Small package capacity is expected to exceed volume in 2022. Expected capacity for small parcel carriers in 2022 is estimated at 110 million parcels per day, with an average daily demand of just 92 million packages per day. This is good news as Q4 is typically the busiest time for small parcel shipping. It is expected that there will be capacity to ship all parcel shipments during peak of 2022. Many retail consumers are shopping earlier and this along with added capacity is driving what looks to be a much smoother peak season for parcel carriers. LTL Outlook LTL continues to demonstrate freight volumes at, or exceeding, industry supply capabilities. The manufacturing industry is the historical foundation of the LTL trucking segment, and it continues to demonstrate growth in both the Purchasing Managers Index and job creation. The August ISMPMI registered 52.8, which illustrates 27 months of consecutive growth. Growth rates do seem to be slowing, but with what growth there has been, there could be shortages of capacity in Q4. In addition, manufacturing employment increased by 22,000 in August according to the Bureau of Labor Statistics, continuing its expansion. With LTL’s foundation freight of manufacturing expanding, LTL continues to grow due to the expansion of the e commerce retail that middle-mile freight needs. TL Freight Outlook Rates have dropped some in Q3 and it is expected that there will be small increases for the holiday season. If spot and contract rate deflation continue for another quarter or two, it will likely push capacity out of the market, leading to the start of the next cycle of increases in mid-2023. There is much uncertainty in the market currently, as some analyst are projecting rates to remain steady and others slight increases. LOGISTICS MARKET October 2022 The busiest time of the year is almost here, especially when it comes to small parcel shipping. FedEx and UPS are gearing up for another strong peak season. Planning and communication with vendors will be key for success during this time.
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