Trucking Contract Rate Trends for 2018 – Bigger Rate Increases in the Future
What’s in store for the transportation industry over the coming year? Get your semi truck tow dollies ready, because experts are predicting a “trucker’s market” in 2018.
Supply and Demand Continues to Tighten
Trucking analyst John Larkin of Stifel Nicolaus says that growing demand due to economy growth is being stretched by the shortage of drivers. While the lack of skilled blue-collar labor cuts across the entire economy, low pay scales are contributing to the specific difficulty in transportation.
According to Larkin, driver pay rates began to increase in the second half of 2017, but the base was so low that it will take several more raises to move the needle on the driver shortage. In addition, the Electronic Logging Devices (ELD) mandate was fully implemented as of December 17, which could further aggravate the situation.
Truckload Rates on the Rise
Another effect of the ELD mandate could be increases in truckload rates, which have already been rising. Larkin explains that it began with “an inflection” in spot rates during mid-2016, but the normal six-month lag time for contract rates ended up to be just over a year.
Less-than-truckload (LTL) rates have seen more modest increases recently, but that could change in the next 12 months. Between marketing automation, the growth of e-commerce, and overflow freight from truckload carriers, demand for LTL carriers is becoming greater.
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With this anticipated scenario for 2018, the productivity of your trucking company needs to be on point. Visit our website and chat with our sales engineers to find out how semi truck tow dollies like our Electric Yard Dog are the solution to your efficiency and safety challenges.