Commercial Trucking Rates Dip, But Don't Expect the Trend to Last
For anyone who has been living under a rock lately, there is a massive, nationwide shortage of trucks and drivers.
Trucking rates on the spot market have dipped slightly to $2.17 per mile, but they are coming off a record high last month of $2.26 for vans. Some rates were even higher for flatbeds and reefers.
Most shippers agree that the decline in rates won't last.
The economy is at full employment, and the demand for freight is incredibly strong. Combine that with the new ELD law coming to full enforcement in April, and there will be even less semi's out on the road.
According to the DAT, demand is currently measuring at 7 loads per available truck.
Last year at this time, the demand was 2.4 loads per available truck.
Large commercial trucking companies are turning down thousands of loads per week. In fact, Heartland Express Inc. based out of North Liberty, Iowa, has reportedly been turning down up to 10,000 loads per week on average. The main reason?
They simply can't find drivers.
The government continues to pile on regulations that make it harder for truckers to earn the decent living they used to. New drivers and veterans are leaving in droves for jobs in construction or energy, both of which pay better and allow employees to spend more time at home.
Trucking companies finally have the upper hand when it comes to negotiating freight contracts. Some analysts believe that rates could rise as high as 10% by the end of 2018.
The question remains: Will companies use these rate increases to pay their drivers more? Will they recruit new operators? Or will shippers simply move more freight to rail?
Only time will tell.
Owner Operator Direct provides top notch trucking insurance to OO's, whether operating with authority or as leased drivers. Give us a ring at 800-499-1044 during weekday business hours if you want a quote, or answer some questions online and we'll email you one.