ITS Logistics warns shippers budgeting for flat rates may see higher transportation costs due to shrinking carrier capacity and rising expenses.
Shippers planning flat transportation budgets for the year may face higher costs as freight capacity tightens. Driver shortages, carrier closures, and regulatory pressures are reducing available capacity, while fuel costs rise, increasing operational expenses for carriers.
The post-pandemic inventory overhang is clearing, but brands now face higher costs for goods, with some products rising from $1 to $1.52. This shift is pressuring cash flow and forcing companies to improve inventory turnover amid elevated transportation and tariff costs.
Freight demand remains uncertain, but any sudden spike is unlikely to trigger the same carrier response seen in previous years. Shippers slow to adjust may face significant cost increases as market conditions shift.