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August 28 2023

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August 28, 2023 | Journal of Commerce 39 www.joc.com Surface Transportation Rather than going to two or three contract carriers in a routing guide to secure capacity, shippers are going direct to the spot market in lanes where they have low or infrequent volume, a trend DAT fi rst noted last year, Caplice explained. "The spot market is being used strategically by shippers to avoid routing guides," he said. "Shippers are more willing to take advantage of the dynamic nature of the market and put up with some pricing volatility." Caplice and the other speakers urged shippers to view the extended downturn in goods shipping to build deeper carrier partnerships. "Hopefully, you're getting your relationships with your asset-based and non-asset carriers in place," Caplice said. "We all know the mar- ket will turn; it's not going to go on like this forever." JOC email: bill.cassidy@spglobal.com trending slightly below pre-pandemic levels" of shipments and spending. More sophisticated shippers Caplice said shippers are using the extended downcycle to rethink their supply chains. "What we've generally seen is that shippers are becoming more sophisticated" in how they use transportation modes and procure services, Caplice said. In a typical downturn, spot mar- ket shipments drop to 10% to 12% of total shipments, with the rest mov- ing under contract, he said. But in 2023, the spot market still accounts for 20% of shipment volume. "The Southwest is a power- house," Holland said. "We attribute this to cross-border trade with Mex- ico, and oil production continues to be strong." He also pointed to a shift in imports from the West Coast to Port Houston. In other regions, including the West Coast, Holland sees greater consolidation of freight a ecting shipment volume. At the height of the pandemic, "people just wanted to ship stu as soon as possible, get it on a truck and get it moved," he said. "Now there's a trend toward more consolidation." By contrast, the Northeast saw shipment volume drop 9.2% sequen- tially in the second quarter and 27.1% year over year. Shipper spend- ing in the region was down about 11% both sequentially and annually. "Some regions are still faring badly compared to pre-COVID data," Holland said. "Right now, we're Sept18-20 2023 MiamiBeach ConventionCenter Americas Food & Beverage Show & Conference TheGlobalMarketplaceforthefoodanddrinkindustry. www.americasfoodandbeverage.com "We're set up to start a recovery, but it's probably two quarters away, maybe three."

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