TRUCK RATES KEEP INCREASING
Truck rates, both full truckload and less-than-truckload continue to increase at a rapid rate in the first half of 2018. Most LTL carriers have already announced a hefty 5.9% general increase this Spring, coming less than a year after last Summers’ 4.9% GRI.
However, the greatest increases have been on the TL side with many shippers reporting double digit increases of 10-15%, if they can even find carriers in certain lanes. A number of issues are driving these increases:
- A steady increase in the economy.
- A critical shortage of drivers with some estimates citing a national shortage of 50,000 drivers. Compounding this is the fact that the majority of the current drivers are over 40 years of age with many due to retire in the next 5 years. Legislation to reduce the age for an interstate CDL from 21 to 18 years of age is being talked about, but when or if this comes about is open.
- The implementation of ELD’s (Electronic Logging Devices) is now mandatory and being enforced. The hours of service laws have not changed, but the electronic devices replace the old paper logs which were easy to falsify in order to drive extra hours. While most of the larger TL carriers have had ELD’s for many years, smaller outfits did not, and many pushed their drivers beyond the legal limits. Now that everyone must comply, productivity has declined, with the most challenging lanes now in the 500-600 mile range. These lanes often cannot be completed legally in a day, with many smaller carriers refusing to now take them, at least at the previous price, as they are now a 2 day load for a driver.
The tightness on the TL side has also had a trickle down effect into several other markets, mainly intermodal, and LTL, with some truckloads being broken down into 1, 2 or 3 heavy LTL shipments.