By Nick Lung.    Photo：Andrea Musto

At a time of record low unemployment, there have been mass layoffs in a key part of the supply chain: the freight forwarding industry. Trucking companies to cut nearly 1,000 jobs in 2023 mass layoffs. The brokerage had laid off more than 700 people in the previous year.

A freight broker is an intermediary between a carrier (or transportation provider, such as a truck driver) and a shipper (anyone trying to move goods, such as a retailer or manufacturer). There are also freight forwarders, who handle international shipments and the customs involved.

Such layoffs come as no surprise to anyone who has followed supply chain news over the past few years. From the middle of 2020 to the end of 21, various freight transportation methods are extremely popular. In June 2020, the inventory-to-sales ratio fell to an all-time low, indicating retailers were running unusually low levels of merchandise to meet consumer demand. The rate fell even lower through 2020 and most of the 21st century, before slowly starting to climb again through November 2021. This demand for commodities translates into more freight demand. The number of shippers requesting more shipping capacity increased rapidly in the spring and summer of 2020 as consumers began spending stimulus money and paychecks on durable goods such as exercise bikes and outdoor furniture. However, capacity did not re-enter the market at the same time.

That makes freight brokers incredibly rich. Eden Prairie, Minnesota-based freight brokerage giant CH Robinson's net income rose 66.7% in 2021 from the previous year. This bull market came to an abrupt end in the spring and summer of 2022. Consumer demand started to slow in early '22 as some began spending cash on travel or other in-person services while others braced for inflation. Over the next few months, some of the largest freight brokers and freight forwarders laid off staff.

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