2018 1ST QUARTER NEWSLETTER

February 14, 2018

 

 

At the start of every quarter, the Custom Pro Logistics team reviews the issues and events that are currently affecting our industry. Here’s our take on the state of things as we move into 2018:

 

 

2017 Economic Impact on Q1 2018


 

 

The first three weeks of January topped the national average spot truckload rates for the peak season in 2017. How much of this increase can be attributed to the latest changes in the economy – including the tax reform bill from late last year?

 

Preliminary estimates show the U.S. economy ended the year with 2.6% GDP growth in the 4th quarter, extending one of the best stretches of growth during the last eight and half years.

 

Learn More…

 

 

 

Tonnage and Freight Index Averages on the Rise


 

 

Truck tonnage rose 3.7% in 2017, the largest annual increase since a 6.1% gain in 2013, according to American Trucking Associations’ Truck Tonnage Index. The annual increase came despite a 5.7% year-end drop in tonnage from November to December.

 

In addition, The Cass Freight Index rose 7.2% in shipments and jumped 16% in expenditures in December 2017 (versus December 2016). The closing value for December 2017 shipments was the best for that month going back to 2013.

 

Learn More…

 

 

 

ELD Mandate: Update

 

A recent survey co-sponsored by Bloomberg and truckstop.com reports that an estimated 28% of trucks on the road (800,00) have yet to comply with the ELD mandate. In related news, the number of ELD vendors has risen from 120 to 167 since the mandate rolled out in December 2017.

 

While none of the new companies offering the technology have been removed from the registry, truckstop.com recommends reviewing their list of accepted vendors on or near the April 1 deadline.

 

Learn More…

 

 

The Driver Shortage: Need Exceeds Supply

 

 

The recent spike in transportation demand is driving trucking companies to charge as much as 30% more for long-distance routes, compared with prices a year ago,
and they’re hard pressed to add capacity because of a long-standing shortage of drivers.

 

Sources claim the labor scarcity is getting worse, and a few are attributing the crunch to the new federal rules that prevent big-rig operators from exceeding limits on their hours behind the wheel.

 

Learn More…

 

 

 

The Driver Shortage: The View from Nogales

 

The transport of produce from Mexico has become
a serious issue, with more deliveries arriving across the border than there are carriers to move them into the U.S.

 

One VP of Sales and Marketing noted that on January 4, 2017, there were 800 trucks arriving into Nogales, and only 200 to receive the goods due to the recent trucking shortage.

 

Learn More…

 

Spot Market Rates: On the rise in tandem with tonnage

 

Truck tonnage rose 8.8% in January on a year-over-year basis, according to American Trucking Associations’ monthly for-hire truck tonnage index.

 

“Last month’s gain in tonnage fit with the anecdotal reports we have been hearing from fleets — that freight was solid in what is typically a softer month,” ATA Chief Economist Bob Costello said. “With the economy strong, the drivers of truck freight solid and the inventory cycle in favor of motor carriers, I expect freight tonnage to remain robust in the months ahead.”

 

Learn More…

 

Looking Ahead to 2nd Quarter

 

Analysts expect capacity to become even more scarce in April when produce shipments pick up and full enforcement of the ELD rule kicks in. Vehicles without the devices may be removed from the road. “If this is the slow period, what happens when seasonality starts to pick up?” said Ravi Shanker, a transportation analyst with Morgan Stanley. It is a fragile balance with potentially a 3-5% more movement could result in a greater shortage. Eventually market dynamics may correct the imbalance, and the record sales for new equipment is a clear indicator that additional supply is on the way.  

 

And that’s our perspective at the start of 2018. We’ll be posting regularly to this blog with our take on the latest issues and changes in the industry. And look for our Q2 Market Report at the start of April.

 

If you have any questions about the content in this article, please feel free to email us at info@cprolx.com.

 

And if you would like to know more about our freight transportation services or carrier opportunities, don’t hesitate to contact us:  

 

139 W McMicken Ave #100

Cincinnati, OH 45202

Tel: (800) 275-6574

Email: info@cprolx.com

 

 

 

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