A futures market is finally opening for the $726 billion trucking industry
The first futures market for trucking freight will open on March 29.
Companies like Kellogg’s, Amazon, ExxonMobil, and more aren’t able to reliably understand the long-term costs for transportation, but a trucking futures market could help that.
Due to the volatile price of trucking costs, companies like General Mills and Procter & Gamble had to unexpectedly raise prices in 2018.
Craig Fuller, CEO of FreightWaves, is used to people telling him that trucking is an obscure industry — even though it moves 71% of the country’s goods.
His response to that is to point out how trucking compares to, say, the energy industry. Trucking transportation services are a $726 billion market, while petroleum refining total $501 billion in the US.
And trucking is about to catch up to energy in one significant way. On March 29, the country’s first trucking freight futures market will sound its opening bell. That means the tens of thousands of firms who use trucks to move their goods will be able to better forecast what transport costs will total as far as 16 months ahead; transportation costs represent some 8% of US GDP.
“People always think about energy prices as creating inflation in the market,” Fuller told Business Insider. “Trucking and transportation is actually a bigger cost.”
The freight futures market will be in Chattanooga, Tennessee. It’s in partnership with FreightWaves, DAT, and Nodal Exchange.
Read more: A 4-year-old trucking startup achieved a major victory in fixing one of transportation’s biggest inefficiencies — and it’s a huge win for truck drivers
Trucking is a massive industry that touches many parts of consumers’ lives. According to Fuller, there are more than 4,500 trucking companies that bring in more than $20 million in revenue annually.
And there are 20,000 shippers who spend more than …read more
Source:: Business Insider