Market Update – Minneapolis
The shipping industry has been faced with many obstacles over the past couple of years that need solutions. While capacity issues and labor and equipment shortages continue to adversely affect the freight shipping market nationwide, we want to take a closer look at how these challenges are affecting local markets specifically and how shippers and carriers are dealing with them. Today we are looking at the shipping market in Minneapolis, Minnesota, and we spoke with Transcon Manager Sean Haug to help us get a clearer picture of the market conditions in the Twin Cities.
Capacity Issues in the Minneapolis Market
Like most freight markets in the country over the last year and a half, capacity issues and high prices are some of the biggest challenges facing the Minneapolis market. While there is more capacity available than some other pockets of the country, providers can still struggle to find the trucks and drivers needed to meet the increasing demand for freight shipping. And while local cartage and pickup and delivery trucks can be found more readily than over-the-road long haul trucks and trailers, the prices have risen significantly, more than doubling in the last 15-16 months. However, there is also good news.
Despite problems common in many pockets of the country with loads being dropped or drivers not showing up because they were offered more money elsewhere, the local market in Minneapolis has been fortunate not to experience a large number of these instances. As the market struggles to recover, reliable local providers have made a solid effort to accommodate shipping needs and last-minute requests from brokers and shippers.
Capacity Overflow from Larger Markets
One of the national shipping trends that has been occurring in recent months is the surge of capacity overflow from larger markets into smaller ones. For instance, as mentioned in a previous market update, Portland has experienced an influx of freight overflow from the Los Angeles and Seattle markets as brokers search for more available warehouse space or local trucking capacity.
While Minneapolis has not experienced many of the capacity issues that larger market cities have and might be considered a target for overflow freight, the city’s unique and somewhat isolated geography and the fact that the majority of import cargo comes through Chicago has insulated it from a lot of potential overflow that might otherwise arrive from larger markets.
In this way, Minneapolis has been able to weather some of the capacity challenges weighing down the national market, and though prices have risen, the truck and trailer availability remains somewhat stable.
Opportunities for Recovery and Growth
Because of these distinctive circumstances, new opportunities for growth have actually materialized in the market. As some LTL providers have struggled to keep up operationally and been unable to meet the needs of customers, Expeditors and other brokers have been able to step in and move cargo where it needs to go. Similarly, as some large providers such as FedEx have trimmed their capacities and embargoed certain shippers and locations, smaller LTL companies have been able to accommodate those shipments and keep freight moving.
As the harsh Minneapolis winter approaches, the problem-solving focus for shippers, brokers, and providers will shift to seasonal challenges that come with winter slowdowns and weather delays. Still, the local freight industry is confident that the market will remain stable through the season and, hopefully, continue to recover over the next couple of years.