Trucking Costs Rise as Market Conditions Tighten

Market conditions are setting the perfect stage for an increase in trucking rates.  Trucking capacity constraints, increasing freight demand, tougher customer requirements such as narrow delivery windows, and a growing U.S. economy set the perfect stage for an increase in rates.

Numerous recent market evaluations are recognizing double digit (%) rate increases with 2018 expecting to experience continued pressure in rising truckload rates.  The repercussions are being felt by companies, large and small, as supply chains cope with rising transportation costs and narrowing profit margins.    Companies such as Hershey’s, Clorox, and Prestige Brands are coping with extra costs by adjusting gross margins, selectively expanding trucking capacity, and making investments in their supply chain to ensure products reach store shelves and service levels remain high.

Electronic Logging Device (ELD) Mandates Stifles Drivers & Shippers

Last minute demand for ELD’s just before the mandate took effect on December 18, 2017 overwhelmed ELD vendors.  While thousands of truck drivers have yet to purchase ELD’s many who did are still struggling with installation and training issues resulting in shipping delays, reduced capacity, and rising rates.

The ELD mandate has been on the books since December 2015 offering the industry over 2 years to prepare.  Smaller carriers and owner-operators who delayed embracing the ELD mandate, hoping legal challenges would prevail now find themselves struggling to catch up as orders for ELD’s are backlogged.  While some carriers have filed for and received 90-day waivers from the Federal Motor Carrier Safety Administration (FMCSA), it’s hard to imagine the FMCSA waving a magic wand and granting waivers for all petitions received; only time will tell.

The full impact of ELD requirements has yet to be fully realized; however, 500 to 600-mile trips will now take two days to complete as opposed to one meaning costs will rise.

​Full enforcement of the ELD mandate takes effect on April 01, 2018.