Natural disasters, driver shortage, a growing economy, higher input costs, increasing pay for qualified drivers…all factors contributing to the highest spot quotes the industry has seen in over two years with van rates on the truckload spot quote market reaching a national average of $1.94 per mile and reefer rates increasing from $2.19 to $2.22 per mile week-over-week, according to DAT Trendlines.
While Hurricanes Irma and Harvey wreaked havoc in the nation, no doubt influencing freight rates by shrinking capacity, trends show an increasing demand for freight that is independent of the disasters and with an upcoming holiday freight season quickly approaching, rates are expected to remain higher than normal through the end of the year.
During the Council of Supply Chain Management Professionals (CSCMP)’s annual meeting, industry experts anticipate contract rates to increase between this year and next similar to spot quotes, climbing “higher in the 2017-18 time frame than at any time since the second half of 2003 and early 2004.” 1
In fact, talk among those in attendance at the CSCMP’s meeting believe a large carrier, who went unnamed, to be increasing their rates “by 10% across the board,” noting that carriers need to pay more for qualified drivers, which are becoming harder to find, as well as account for higher equipment costs, insurance premiums, and other rising expenses for operating a business. 1
As a result of increasing rates spreading like wildfire across the industry, brokers as well as shippers are making an attempt to lock in contracted rates with carriers, especially prior to the December 18th deadline for trucks to become ELD compliant, which is expected to further tighten capacity.
A group of 31 organizations continue to fight implementation of the ELD mandate, asking that it be postponed for two years until concerns are fully addressed.
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