Dive Brief:
- Trucking continued strong growth in October following a record couple of months which had been boosted by the hurricane season.
- Shipments increased 0.5% MoM and 2.9% YoY, while expenditures increased 3.9% MoM and 11.2% YoY.
- Right around this time in previous years, shipments dropped off, and while 2016 saw more of an uptick, 2017's growth is stronger.
Dive Insight:
According to the Cass Freight Report's data, demand is still strong and capacity tight since the hurricane season, which could be the reason why expenditures didn't grow as quickly as they did in September.
Although October was a strong month for the trucking industry, there are a few warnings signs for peak season, especially as the ELD mandate implementation looms.
Accelerating demand combined with tightening capacity is one. It will likely drive up rates, which could be good for carriers, but for shippers that's going to be frustrating during peak season — especially if those rate hikes get passed on to consumers.
The UPS peak season surcharge illustrates this phenomenon, but more 3PLs and carriers could follow UPS' lead depending on how the market fluctuates through the holidays. Then there's the ELD mandate; truck drivers have already expressed extreme dissatisfaction with the mandate, which is causing some shippers and carriers to fear a downturn in available truck drivers.
Because the truck driver turnover rate is already high, that's a real concern for the trucking industry over the holidays and going into the new year.
