Shippers are expecting higher rates and less capacity this year, so many are trying to lock in contract rates and secure trucks before the spike. Carriers have been hammered by low fuel prices, strict regulations, and rising equipment costs.
The ATA says the trucking industry is currently short about 48,000 drivers, and that number is expected to surge to 890,000 by 2025. Fewer drivers mean less truck capacity.
According to Road Scholar, shippers have already been experiencing effects of less capacity. In the last week of December 201, load-to-truck ratios were higher and availability on load boards dropped 17% – capacity outpaced it, falling 29%.
Given a capacity shortage, carriers can be more selective about what freight they haul.
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Jack Atkins, the transportation analyst, says that the capacity restraint will give carriers and brokers a favorable year since spot market demand will increase with rates. Atkins predicts, “contractual rate increases in the 2017 bid season as a result of the mandate and the potential for driver wage inflation.”
What can shippers do to secure capacity in this market?
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