Last year’s changes to hours of service (HOS) rules, shut down in operation by some 
trucking companies and improving economic activity will be visible as the “true picture” of the trucking capacity shortage unfolds in 2015. Shippers will have to constantly keep a close eye on the various changes that may affect less-than-truckload (LTL), small parcel and full truckload (FTL) costs. This is because fuel prices and regulatory concerns are in a constant state of flux.
The below statistics shed light on the current state of the industry and show supporting data from key financial indicators impacting trucking pricing.
Fuel – Contrary to predictions that diesel price would fall by 2-4 percent in the first quarter of 2014, fuel prices have increased by approximately 2 percent during March 2014 compared to December 2013. Increasing fuel prices have directly affected trucking pricing or truckload costs.
FTL & LTL Pricing – While LTL increased by 1-3 percent, FTL increased by 1-2 percent in 2014. Industry LTL heavyweights such as FedEx, UPS Freight and Con-Way Freight increased their rates by 3.9 percent, 5.4 percent and 5.4 percent respectively during the year. Though some shippers were protected from mid-year rate hikes by their contract terms, many were not. If we factor specific lanes and shipment, the rate increase may be actually higher than this.
Fleet Size: Fleet sizes have decreased as well. The average fleet size in the trucking industry was down 10-15 percent in 2014 bringing down trucking capacity.
Regulatory Impacts: Changes to the U.S. Hours-of-Service (HOS) rules have resulted in continued driver shortages. These changes have resulted in 3.5-5 percent reduction in driver pay while adversely affecting recruiting and retention in the trucking industry. The industry is now looking at a “qualified driver shortage” and has to look for new ways to attract new drivers. The current driver shortage is around 30,000 and as volumes go up it is estimated that 100,000 drivers will be needed on an annual basis to keep up.
What all these statistics point to? Shippers will have to pay more to deliver their shipments in 2015. Increasing fuel costs, HOS changes, and driver and capacity shortage, as well as other factors will give truckload carriers a leverage to increase rates and surcharges in the coming year ahead.
Stay on top and up-to-date with the changes happening in the truckload industry. Join expert speaker Noel Perry, an authority in the heavy freight industry, as he highlights the changes in truckload pricing and how it will affect intermodal transport in 2015.
