Uptick in Freight Market Volume
Freightwaves market data indicates that the freight market may be at the beginning of a recovery. For the first time in a year, load volumes are up over 2018 numbers. With many carriers cutting capacity and rising freight volumes, trucking rates are starting to come back up. Major markets across the U.S. are seeing week-over-week upticks in volume. Additionally, spot market volume is up 7% over the first half of 2018.
Furthermore, top carrier executives in the industry predict a tightening of capacity in the coming months to adjust to the decline in volume. However, if capacity tightens too much prior to the end-of-year freight rush, then the market rates could skyrocket again. We recommend securing relationships with carriers ahead of time so that when capacity tightens up again your shipments are covered at the right cost for your supply chain.
Freight Market Forecasting & What to Plan For
In addition to the driver shortage in the freight market, there is a shortage of mechanics. According to Andy Dishner, COO of Konexial, the freight industry is feeling the consequences of a shortage of mechanics and technicians. Another report from the U.S. Bureau of Labor Statistics projects that nearly 67,000 diesel service technicians and 75,000 mechanics are needed to replace retired workers and meet demand in the industry by 2022. Carriers are now seeking to employ their own maintenance work force to battle higher outsourced maintenance costs.
Another large cost for commercial trucking fleets today is fuel. Fuel costs currently represent about 22% of a fleet’s total operating cost. This takes away from front end talent acquisition for freight carriers. However, new idle-reduction technologies are becoming a primary consideration for fleets. Not only for reducing costs, but also improving efficiencies in a number of areas including hiring new talent. According to a North American Council for Freight Efficiency (NACFE) report, the group expressed high confidence in electric engine idle tech, driver training/incentives and driver comfort in the cab. The report goes further to state that companies should see a return on their investments in new engine idle tech in under a year. NACFE predicts that trucks can save 1% in fuel economy with a 10% reduction in idling.
BM2 Freight Services, Inc.
Phone: (859) 308-5100