The freight market in July may be seasonally slow, but underlying conditions point to a significant shift toward quality and contracted rates, according to FreightWaves. This trend could reshape how carriers and shippers engage, with load boards losing market share and contracted rates gaining prominence.
July Market Dynamics
July is typically a slower month in freight, but the current environment is being described as a potential 'Goldilocks scenario' — not too hot, not too cold. The seasonal lull is not alarming, as fundamental changes are underway in how freight is procured and priced.
Shift Toward Contract Rates
There is a notable shift away from spot-market transactions toward contracted rates. According to the report, underlying conditions suggest a move toward 'quality and contracted rates.' This indicates that shippers are prioritizing stability and reliability over short-term cost savings, while carriers are locking in longer-term commitments.
Load Board Market Share Decline
Load boards, which have traditionally served as a primary spot-market tool, are losing market share. The report explicitly states that 'load boards are losing market share,' though the reasons are not detailed. This could be driven by carriers and shippers moving to direct contract relationships or using more sophisticated freight-matching platforms. The decline of load boards reinforces the shift away from spot pricing.
Implications for Future Rate Increases
With the market moving toward contracted rates and load boards declining, the report suggests that these trends 'mean for future rate increases.' While no specific numbers are provided, the implication is that a market more reliant on contracts could see more predictable and potentially higher rates as carriers gain pricing power from long-term agreements. Shippers and freight forwarders should watch for rate adjustments as contracts are renegotiated.
Operational Considerations
Freight forwarders, logistics managers, and 3PL operators should monitor the evolving balance between spot and contract volumes. The decline of load boards may require alternative sourcing strategies. Carriers may benefit from increased contract stickiness, while shippers should assess their exposure to spot volatility.
In summary, the July freight market is not merely experiencing seasonal doldrums — it is undergoing a structural shift toward contracted rates and away from spot-based procurement, with load boards losing influence. This sets the stage for future rate increases that could reshape carrier-shipper relationships.
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