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Shippers Lock In Higher Contract Rates To Hedge Against Spot Price Inflation
Shippers lock in higher contract rates to hedge against spot price inflation
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Mar 18, 2018 at 12:29 PM CST
https://www.freightwaves.com/news/shippers-contract-rates
For the first time in years, quarterly conference calls with major shippers are talking about transportation cost headwinds have a profound impact on their profit margins. In fact, freight transportation as a percent of the costs in the economy is greater than that of oil prices. If the freight market is inflationary, it has a tremendous impact on the margins of corporations. If freight were traded like a traditional commodity- i.e. energy, agriculture, or even electricity- there would be a way for shippers to hedge their exposure. Unfortunately, until the launch of freight futures contracts that are planned for late 2018 by FreightWaves, DAT, and Nodal, shippers must find other ways to ride the truckload pricing waves.
FreightWaves’ CEO was featured on CNBC last fall discussing freight futures.