Congratulations shippers, you’ve nearly made it to the end of the year!
2022 remained a year of supply chain uncertainty and above-average rates.
Although things have started to slow down a bit, the eCommerce market has still seen steady growth year-over-year.
Efforts to try and stabilize the Canadian economy have netted mixed results for businesses and consumers, so to sum it all up, 2022 was not easy to navigate.
This begs the question: what does 2023 have in store?
Will this coming year be another filled with uncertainty, or will the shipping industry and the economy reach the normalcy that it has been trying to recapture since 2020?
Here are our predictions for how the new year might turn out for shippers.
Shipping Rates May (Finally) Be on the Decline
With each passing year since 2020 it has felt like shippers have heard the same story over and over: forecasting predicts a return to pre-pandemic rates, only for them to rise over the course of the following year.
What makes the coming year any different?
For starters, a report released in November by the Canadian General Freight Index showed freight cost decreased across the board between August and September, including the first dip in base freight costs since October 2021.
Does this evidence guarantee a return to pre-pandemic rates on freight and courier services? Of course not.
Volatility in China due to ongoing problems with COVID, the continuing conflict between Ukraine and Russia, and ever-increasing crude fuel prices make it highly unlikely that rates will ever truly return to what they were three years ago.
That said, forecasters are confidently pointing toward an overall dip in shipping rates which, following a year with a near-constant increase in rates, would be a welcome relief for shippers.
eCommerce is Rapidly Rising, but In-Store will Remain Steady
For many businesses over the past three years eCommerce was the life preserver that kept operations afloat, so much so that the average year-over-year growth in eCommerce revenue in Canada went from 8% per year pre-pandemic to over 20% per year from 2020 onward.
While some predicted that this eCommerce boom, coupled with the pandemic, would significantly and permanently impact in-store shopping, the most recent reports from Statistics Canada reveal that, barring the initial jolt caused by the early pandemic, in-store retail sales have remained on a consistent upward trajectory overall.
If this information can offer shippers any takeaway for 2023, it’s this: your B2B (keeping in-store shelves stocked) and B2C (getting goods to your customers) shipping strategies are equally as important to one another now as they will ever be. But, if eCommerce is an area that your business has yet to explore, 2023 may be the year to examine that option.
Carriers Will Push Hard to Go Green
It’s no surprise to anyone in the shipping industry that carriers have been working toward reducing their carbon emissions for some time, but recent news suggests that 2023 may be the year when these initiatives really get rolling.
Some carriers are taking advantage of the large-scale electric vehicle (EV) plant that was newly minted just earlier this month, which is forecasting the production of 50,000 zero-emission vans annually by 2025.
Others have opted for the long game, partnering with EV manufacturers as far back as 2020, with large-scale orders on vans now currently underway.
What this means for the industry this year is a complicated answer.
In time, it is possible that EV technology will become the industry standard, minimizing carriers’ dependency on fossil fuels, and lowering rates as a result.
However, at so early a stage this is difficult to predict.
Short-term, one can expect that the sudden push to EV from multiple prominent carriers will, if nothing else, start a trend across the industry, and we may quickly see more carriers of various sizes following suit.
Rising Interest Rates Could Open the Market for Long-Term Growth
Though it’s a topic that no one wants to discuss, it’s impossible to avoid, especially as a business owner.
This past June, Canadian interest rates reached a 39-year high of 8.1% in an effort to curb recent rapid inflation. While the latest statistics have shown evidence that this tactic has been moderately successful, it is uncertain if it will be enough long-term, or if further hikes are on the horizon.
For savvy business owners, 2023 will be the year to focus on the right type of growth. Look to expanding markets, product line extensions and growing your already existing customer base. Ultimately when interest rates have cooled down, this will set your business up to grow in a more substantial way than those who may choose to spread their resources too thin this year.
Freightcom Will be There for You Through 2023 and Beyond!
Despite the best efforts of the industry’s brightest minds, there is no real guarantee as to what the coming year has in store for shippers.
Bearing that in mind, one prediction we can make with 100-percent accuracy is that Freightcom will continue to provide you with industry-leading shipping solutions.
Freightcom is an all-in-one multimode shipping platform that offers discounted rates on LTL and parcel shipping from North America’s leading carriers.
Our easy-to-use platform can help streamline your shipping and help you book your shipments with ease, all for zero startup or monthly fees!
Contact one of our shipping experts today and let Freightcom help you be bold with your shipping for years to come.