IPC COMMUNITY 21 SPRING 2023
A few factors are keeping freight prices from
dropping more quickly. First, fuel costs are
up. Moreover, diesel fuel costs are roughly 50
cents per gallon higher than what they should
be, given the current price of oil. Second,
industry capacity is likely shrinking. Small car-
riers are probably exiting the market because
of cost pressures and weak spot market vol-
umes and rates. This is one factor that will keep
spot prices from significantly falling further. A
big drop in rates would cause small carriers
to exit the market and cut available capacity.
Finally, carrier costs are up, creating a floor as
to how far prices can fall.
CONCLUSION
Prices across all freight transportation
modes should soften in 2023; however, many
electronics manufacturers expect prices to
continue drifting higher. Survey results from
an IPC report
1
show that the industry expects
freight costs to rise 7.2% on average in 2023.
Companies operating primarily in Europe
expect prices to rise 9.1%; companies oper-
ating primarily in Asia-Pacific (APAC) expect
freight costs to be up 10.3%; and companies
operating primarily in North America expect
costs to be up 6.3%.
REFERENCES
1. Current Sentiment of the Global Electronics
Manufacturing Supply Chain, February 2023.
For additional IPC industry intelligence and
data, please contact me at ShawnDubravac@
ipc.org or visit IPC's industry intelligence website.
Chart 5: National average line haul rates and fuel surcharges for vans.
Spot rates are for shippers without carrier
contracts but that freight to move. A contract
rate is a fixed price the carrier agrees on to move
a shipper's freight over a set period of time.
