Transportation firms say cargo could become more expensive as demand surges

Transportation companies are bracing for a surge in demand for cargo that could eventually lead to higher prices.

The Federal Transit Administration said it will begin studying how the market can adapt to a growing market for passenger vehicles. 

The agency, which regulates freight services, said it plans to conduct an initial study of the potential impact of the increased demand for freight on freight-delivery companies. 

Transportation experts said the freight-trading industry is already undergoing a steep rise in traffic as Americans travel farther and faster than they have in decades. 

“It’s just not a sustainable market,” said Greg Smith, vice president of global market research at consultancy Gartner.

“It’s going to take a bit of time before there is a stable or stable environment to move more cargo.” 

While transportation companies like UPS and FedEx have been doing well, the rise in demand could pose a challenge for the industry.

The volume of cargo is expected to increase by more than a third this year as more people move from cities to the suburbs, said Jason Eppes, an analyst with IHS Markit. 

He said the increasing demand could cause companies to delay or cancel shipments. 

In addition to higher freight prices, the cost of operating cargo ships and the growing size of container ships has also increased as well. 

Cargo ships have been a key part of the U.S. shipping industry for decades, but the amount of cargo shipped by them has increased in recent years. 

Last year, U.K. shipping firm Luscombe said its fleet of 6,000 ships averaged 6,400 tons per day, up from 3,000 tons per week in 2016. 

For cargo, a big factor is the number of containers moving each day.

That makes it more expensive to move cargo, which can add to the cost to operate a ship. 

Gartner said that while it is difficult to predict how the demand for goods and services will grow in coming years, it expects the volume of container shipments to increase. 

Luscombe CEO David O’Connor said he expects the number to increase as the number and volume of shipping companies increases. 

But he also said it is not yet clear how much the increase in cargo volumes will lead to an increase in freight prices. 

That would depend on how freight costs compare to other goods, he said.

“We are going to need to see some time between the number going up and the price going down,” he said, referring to the amount a company charges to ship its goods. 

U.S.-based freight carriers are already struggling to maintain the volume and cost of cargo that they need to run operations. 

As the number on a ship increases, the number that is used to pay for its cargo, or is diverted to pay its staff, decreases, making the cost for moving cargo that much higher, said Mark Eppeson, chief executive officer of O’Brien Cargo Services. 

Bulk cargo has grown so much that there is more volume on board than a truck, he added. 

Overall, U,S.

freight is expected grow about 8 percent in 2017, compared to a forecast for a 7.9 percent increase in 2016, according to Garten’s forecast. 

Some of that increase is due to increased demand as people become more comfortable driving and the number for cargo has increased. 

Other factors are the growing number of passenger vehicles, including the growing use of electric cars, as well as a rise in fuel-efficient cars. 


cargo shipments increased by more at the end of 2016 than at the start of the year, but are expected to be down by more this year, according for the International Maritime Organization. 

Even though the demand is higher, freight is still growing, Eppesson said.