While carriers might have struggled with labor, higher freight rates benefited their bottom line. The spot freight market increased 25% from the post-holiday slump in February to the summer peak, before falling 20% to the end of the year. “This caused shippers across virtually all industries to exceed their 2018 logistics budgets,” the report reads.

But it wasn’t just wages leading to these higher rates. Carrier’s capacity could not keep up demand as shippers sought to bolster their inventory in the face of tariffs and saw increased e-commerce traffic.

The report notes shippers dealt with this by making efforts to become a “shipper of choice.” They worked to become more driver friendly, have well-managed gate processes and limit dwell times. Newer technology, “specifically access to social media-type ratings systems,” allows carriers to better track shippers on these metrics and use this information during bids and “potentially fire undesirable shippers,” the report notes.

“But despite all of that you still had service failures as a lack of available capacity, drivers changing or turning over in the carrier population, you know, made carriers less reliable as well,” Zimmerman said. “So it’s definitely a two-way street.”

Across freight modes, logistics costs rose.

Parcel

Spending on parcel services increased to $105 billion in 2018 and prices in this mode were up 4.9% compared to the previous year. Carries also increased fees like residential and large package surcharges. The report forecasts that e-commerce will continue to drive growth in this area “for several years to come.”

Rail

The implementation of precision scheduled railroading led to “considerable cost reduction” and a pricing environment that was favorable to carriers. This helped to improve the operating ratio at a number of the Class 1 railroads.

Water and ports

The political environment was a major factor in ocean shipping in 2018 with many shipping looking to bring in inventory before tariffs hit. As a result, rates were at some of their highest levels over the last three years despite a 5.7% increase in capacity. This was due to carriers being “disciplined in their capacity deployment, especially during peak season when they often follow through on blank sailings,” the report said.

Air

Air freight rates rose 5% year-over-year on East-West lanes, according to the report.