At the end of this month, the first trucking futures market will open. Since thousands of businesses rely on trucks to move goods, having a better method of forecasting transportation costs could benefit everyone directly and indirectly involved with the trucking industry.
Freight Futures Are a Logical Step
Trucking is a $725 billion industry, which eclipses even the oil refining industry. Yet trucking is still viewed as an obscure and potentially volatile industry. Given the amount of products moved and the vast number of companies that rely on the trucking industry, it is far from obscure. However, after last year, no one can deny that the industry can be volatile. The sheer demand for capacity trucks saw rates fluctuating wildly. By bringing freight futures to the market, firms will be able to more accurately forecast transportation costs and ensure a greater lever of stability.
Benefits for All
More stabilized transportation costs do more than just reduce the back and forth tension between shippers and carriers. Trucking companies will also be able to make plans for growth without having to worry about whether or not the market rates will eat into their own operating costs. This means prices for things like produce will also stabilize for consumers. Additionally, a market for freight futures means the stabilization will allow truckers to get better salaries over time, because trucking companies will not have to worry about their bottom line as much due to volatility.
Freight Futures for a Better Economy
Volatility between shippers and carriers is one of the signals analysts look for when determining an economic downturn. Even though the trucking industry is in a very unique place right now between high demand, a driver shortage, and new regulations coming down the pipe, the potential stabilization offered by a freight futures market could help to slow or even out economic cycles and the impact on trucking companies. Since the entire country relies on trucking in some capacity, having a stable trucking industry is one of the major keys to a better economy for everyone. Freight futures hit the market on March 29th.