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MPact Number of the Week


The net margin earned by 3PLs for dry van’s out of the Inland Empire

This Week in Freight

May 25, 2023

It finally happened. 3PLs average all-in net profits fell below those of our benchmark year of 2019 on shipments moving more than 250 miles out of the Inland Empire. The question to answer is - how long will net profits stay in this range? The current news cycles state that the number of containers inbound to the US is at a seven-month high. The largest source of the increased containers appears to be China. It’s a safe bet that once the brokers adjust to tightening capacity in the spot market, margins should rebound off recent lows and retake some territory north of those in 2019. How much is anybody’s guess. Dry van rates seem to have found resistance at $3,000 all-in. This implies the spot market spread is collapsing to something approaching parity. In fact, this appears to be true. Spot market capacity in week 20 traded at a $194 discount, up from the discount of $344 in week 19. One could make a case that we’re near an inflection point for dry van rates out of the Inland Empire. Inflections tend to cost 3PLs margin dollars until they adjust to the new reality. We’ll look again in two weeks to see if a rebound is occurring. Stay tuned.


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