go here Over the past six years, new investments in natural gas and petrochemical production have had a noticeable impact on the trucking spot market. As a broker, the knowledge and information about factors that affect the supply and demand of freight carriers is important, since this allows you to preemptively attack the market and make the most out of the situation.
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Natural gas is a by-product of the fracking/oil production process. Until recently, there was a lack of infrastructure when it came to the gathering and processing of gas which has resulted in a low domestic price for gas. The low domestic prices in turn discouraged new investments, and gas was then oftentimes, ignored.
However, the difference between domestic and international gas prices creates several export opportunities, and those opportunities led to new investments in infrastructure. And with the process to transform it into liquid form (LNG), which reduces the volume 600 times, it is now easier to transport by road, rail, or ship. This situation alone produced lots of tasks and revenue for brokers who have foreseen this situation.
Natural gas and oil by products also feed into plastics production, which has also increased the need for constructing buildings for the petrochemical industry. In the period of 2015-2019, an estimated 560 new plants will enter the market, with many eyeing the export marketplace. The current plastic industry creates annual sales of $418 billion, which translates to a lot of freights for railroads and trucks alike.
There are three LNG export terminals currently in operation along the U.S. Gulf Coast. Construction has started on three export terminals, with two more proposed. In the middle of them all lies Houston.
Both the construction and the oil industry are major drivers for flatbed freight, and the Houston market already holds the number 1 position for flatbed freight loads. This year, Houston has also become major source of van freight.
source Changes in capacity
While new construction has led to an increased freight movement in and out of Houston, it could also pull trucks away from other markets, choking the market in tighter capacity places such as Atlanta and Chicago. This puts pressure on freight rates to go up enough to affect the national market.
enter site Conclusion
Information is important to you as a freight broker. Rather than following the crowd and going after freight that is already saturated, look for freight that has potential to grow big, and become the forerunner of that market.