What’s the Future of Freight?

As a metal buyer, your most volatile cost of obtaining material is often freight. And with so much of this cost out of your control, it can often be chalked up to simply a frustrating part of doing business. But it doesn’t have to be.

Today, there are companies targeting a more efficient way of managing the process of getting material to you. And the fruits of their labor could be good for your future metal purchases.

First, let's assess the current landscape with regards to freight costs. They are typically impacted by two factors:

• Load-to-Truck Ratio: This is the number of loads that need to be shipped for every available truck. Many believe this is a real-time indicator of the balance between spot market demand and capacity.

• Spot Rates: For the flatbed market, spot rates remained relatively flat over the last quarter of 2021. However, rates were up nearly 2% in January, according to DAT Freight & Analytics.

Don’t expect those spot rates to come down dramatically any time soon. As expected, the conflict between Russia and Ukraine has had an immediate impact on energy prices here in the United States. For instance:

• Future oil prices soared above $100 a barrel – the highest since 2014.

• Gas prices in Texas are averaging $3.24, according to AAA, up 35% from the year-ago period.

• Texans are experiencing the highest retail gas prices in more than seven years.

This brings us back to those companies trying to make the process more efficient. One is FRAYT, a tech start-up, that has built a platform that connect shippers and drivers. Part of this platform is a driver-rating system that favors drivers who can deliver the product in the most efficient manner (e.g., lower cost to the buyer).

We recently had a chance to talk with Tim Yarbrough, FRAYT’s director and advisor, about the shipping start-up’s unique approach to connecting drivers and shippers, and ultimately how it helps lower the cost for metal buyers to receive goods.

One way is through a driver-rating system that incentivizes drivers to get product delivered in the most efficient manner to the buyer.

“We want to know how the true market works in terms of getting product A to consumer A in an efficient manner, and the technology is teaching us how to do it better,” said Yarbrough.

In the end, Yarbrough said, it leads to the creation of a pathway to the one thing that truly makes commerce work: trust.

Listen to the full episode here.