4th Quarter is among us which means increased demand for trucks in an already volatile freight market. Trucks are harder to find and more expensive than ever. Let's take a look at a few items directly impacting the transportation industry as 2017 comes to an end.
E-Commerce Boosts U.S. Shipping Networks
Resurgent demand in the long-stagnant industrial sector and a big seasonal boost in e-commerce are pushing more goods through shipping networks on the land, water and air, say operators who expect the strengthening U.S. economy to keep the growth going into 2018.
From seaports in Southern California to truck docks at central Ohio warehouses, shipping across the U.S. is picking up at a pace that freight companies say they haven’t seen in several years
Truck Tonnage Surges in October
Freight surged in October and carriers are bracing for what could be a record-breaking holiday shipping season. American Trucking Associations said its seasonally adjusted for-hire truck tonnage index climbed to 147.6 in October, a 9.9% jump from the same month a year ago and a 3.3% gain from September.“Continued improvement in truck tonnage reflects a much stronger freight market,” said ATA Chief Economist Bob Costello. “This strength is the result of several factors, including consumption, factory output, construction and improved inventory levels throughout the supply chain.”
U.S. growth forecasts are on the rise
Projections for U.S. economic growth from two Federal Reserve banks have risen in recent weeks. The Federal Reserve Bank of New York on Friday forecast that gross domestic product will rise 3.8% in the fourth quarter, up from a forecast of 3.2% a week earlier.
Fuel, Demand, and ELDs Ratchet Up Rate Pressures
Nov 12 - 18 - Rising fuel prices, unprecedented spot market demand, and the imminent ELD mandate combine to ratchet up the pressure on rates. The national average reefer rate increased 3¢ to $2.40 per mile — a 3-year record — as shippers rush to fill the stores with fresh produce, poultry and meat for Thanksgiving. The average van rate remained at $2.06 per mile, signaling that November's average may hit an all-time high. Flatbed rates slipped 1¢, to $2.29 per mile, which is atypically high for the season.
Is this 2004 all over again?
Average truckload rates continue to move upward as 2018 approaches. Flatbed, Reefer, and Van rates continue to see double digit percentage increases month over month and triple digit percentage increases year over year. Jeff Trucker of Tucker Company worldwide weighs in with his take on the current state of the trucking market.
All Systems Go for the ELD Mandate
The Electronic Logging Device (ELD) mandate is expected to go into effect on December 18, 2017, as planned. With the implementation date looming, logistics leaders should consider the potential regulatory and commercial impact of the mandate on their and others’ assets, drivers and operations.
E-Commerce Boom, Boosts Spot Market Volume
The rapid growth of e-commerce has led major online retailers to re-design their supply chain models, according to Mark Montague, DAT senior pricing analyst.
One result has been a transformation of seasonal freight trends, and transportation spending
Looming Driver Shortage Now a Point of Focus
Trucking and government leaders at American Trucking Associations’ annual Management Conference & Exhibition set their sights on solving perhaps the industry’s most persistent challenge — recruiting and retaining professional drivers..
As Economy Improves so Does Orders for New Equipment
Truckers are getting more confident than ever in the U.S. freight economy. Fleet owners ramped up orders for new heavy-duty trucks to the highest level in nearly three years.
Diesel Climbs to Highest Price in More Than Two Years
The U.S. average retail price of diesel increased 2.2 cents to $2.819 a gallon — the highest price in more than two years — as oil prices rallied on speculation production cuts will continue into 2018 after a meeting of the Organization of Petroleum Exporting Countries in November.
In addition, beginning Nov. 1, drivers across California can expect to pay an extra 12 cents per gallon for gasoline at the pump, and an extra 20 cents per gallon for diesel.
Consumer confidence hits highest level since December 2000
Consumers were even more optimistic in October than economists polled by Reuters expected.
Consumer confidence rose to 125.9 in October, according to the Conference Board.
The index "increased to its highest level in almost 17 years," Lynn Franco, Director of Economic Indicators at The Conference Board, said in a statement. That was in December 2000, when the index hit 128.6.
Riskpulse, the leading provider of weather risk analytics for supply chains, has released their 2017/18 Winter Outlook. This outlook builds on an earlier October report that catalogued the ‘given’ variables going into the season and their likely impacts: these ‘knowns’ included the overall trend of warmer winters over the past few decades and the equal odds of a cold/warm winter during La Niña events.