Dive Brief:
- Trucking industry shipments grew 5.9% MoM in February, up 11.9% YoY, while expenditures jumped 5.2% MoM and 14.3% YoY, according to the Cass Freight Index.
- The American Trucking Associations reported the tonnage index dropped 2.6% MoM in February after rising 1.6% in January MoM.
- The data agrees: volumes and spending continue to skyrocket at record rates, while capacity continues to shrink, which could soon lead to a rate hike.
Dive Insight:
The latest trucking industry data puts 3PLs in an enviable position. Rates could start to rise soon, leading 3PLs to become more and more important for shippers looking to save money in a tight capacity market.
A month ago, the industry was worried about inflation raising prices, but now that's not the most pressing concern. According to Cass Freight, industry watchers should expect the capacity crunch to loosen once rates rise high enough.
The big takeaway here is the industry is in flux, and there are a lot of moving parts and factors including the driver turnover rate, reduced capacity, volume surges, the ELD mandate and autonomous vehicle anticipation. 2018 is still on track to be a record-breaking year for trucking in terms of shipments and expenditures — the best since before 2013 — but the aforementioned industry pressures could be signaling big changes.
E-commerce will continue to grow throughout 2018, which means demand is unlikely to fall any time soon. That said, the industry needs to figure out a way to deal with tightening capacity and an increasingly smaller pool of truck drivers. The market will sort itself out, but the industry should expect growing pains and higher prices until that happens.
