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Freight Rates: Uncertainty abounds

Michael A. Levans, Group Editorial Director -- Logistics Management, 1/1/2008

One of the toughest things we do is develop our annual Rate Outlook cover concept. The cover needs to resonate with you immediately and clearly define that gut feeling you have about your transportation budget for the coming year.

Take another look at this month’s cover…feel a little queasier? Well, if you do then we’ve nailed another one.

Last year, our shipper was struggling to open a ponderous steel door to illustrate our piece “Opportunity Knocks.” He learned that the light that was seeping through the doorframe was, in fact, a beacon of hope signaling that if he made the most of his carrier partnerships he’d be able to take advantage of any new capacity and softening trucking and ocean rates.

And as we reported throughout the course of 2007, that’s exactly what the savviest shippers did. It was a year for diplomacy; and, as we learned, it’s the most tactful shipper who finds success in any rate negotiation.

This year’s concept actually slapped us across the face: We find our 2008 shipper perched precariously on a rickety wooden footbridge suspended high above a green abyss. He’s firmly gripping the cable supports hanging on for dear life. Each step he takes must be calculated; and while it appears that he’ll make it across, there’s a chance he may not. He’s filled with apprehension, an overwhelming sense of uncertainty.

The term “uncertainty” has been bandied about quite liberally in the mainstream media in descriptions of the general economic outlook. And it was literally impossible for our intrepid John Paul Quinn to escape using the word while putting the 2008 Rate Outlook into context for shippers. “No one would have guessed how dramatically these [economic] occurrences would impact virtually every sector of the transportation industry,” he writes this month.

When John Paul finished his reporting he shared something that stuck with me. While he spoke with the top analysts in each mode, he said that after nearly every conversation he was asked what the other analysts were saying. “These are some of the most confident folks you can speak to,” John Paul told me, “but even they were looking for validation. Which leads me to believe that these are exceptionally unsettled times, especially in rate forecasting.”

John Paul has done a terrific job of putting together a balanced economic forecast and has deftly tied that insight in our annual freight-rate projections. And, once again, we’ve invited these top industry analysts to share their candid, gut feelings regarding rate projections with us during our annual Logistics Rate Outlook webcast that will take place on Wednesday, January 30.

So, read Outlook and formulate your questions for the webcast. I’m not saying that our panel will make you feel any less apprehensive, but I’ll guarantee they’ll help you become better prepared.

Comments? E-mail me at michael.levans@reedbusiness.com

Register Now for the 2008 Logistics Rate Outlook Webcast

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