2018 Trends Offer Lessons to Better Manage Truckload Pricing for 2019

Truckload Pricing

Truckload Pricing

Truckload pricing trends show that the current imbalance between supply and demand is sure to continue—which means there will be pressure on general rates for both spot and contract segments.

So says transportation industry expert Dave Malenfant in his AudioSolutionz webinar, “How to Estimate and Manage Truckload Pricing in 2019.” The better you understand how today’s trends will impact future pricing, he continues, the better you’ll be equipped to make smart strategic decisions—about everything from driver shortages to asset utilization.

Spot Rates Flatten As Fuel & Labor Costs Rise

Trucking industry trends through the beginning of December show some stark figures, according to updated data posted by DAT. Spot market capacity for November was up 30% when matched against November 2017, while flatbed load-to-truck is down 36% and reefer load-to-truck is down 40%.

Spot rates, however, were nearly flat: Van rates were up 0.5% between November 2017 and November 2018, while flatbed rates were up 3.4% and reefer rates were up 2.1%.

Truckload linehaul rates were strong, reports Cass Information Systems. In October, the company’s measure of changes in per-mile truckload linehaul rates posted an 8.2% year-on-year increase—an all-time high.

“We expect more nominal record highs in the coming months, with slightly lower percentage increases as comparisons grow increasingly tough through February,” stated Donald Broughton, analyst and commentator for the Cass indexes.

Other key indicators through October 2018, according to Logistics Management, are:

  • Long-distance truckload prices are up 7.8%
  • Operating costs are down 5.2%
  • Fuel costs are up 23.6%
  • Labor costs are up 2.7%
  • Warehousing costs are up 5.3%

Expect Driver Hiring to Increase in 2019

With truckload pricing trends all over the board this winter, your truckload pricing management efforts will need to be sophisticated, industry pros say—and successful companies will need skills logistics managers.

Smart: Get a handle on the factors that affect freight rates and spending, advises Zipline Logistics:

  • Origin, destination, and lane
  • Market capacity
  • Seasonality
  • Attractiveness of freight
  • Fuel costs
  • Mileage
  • Accessorial charges
  • Service
  • Spot rate or contracted rates

Some of the above factors are easier than others to manage. After big jumps in 2017 and 2018, crude oil prices are expected to mostly stabilize, rising by just under $1 to $73.68 per barrel in 2019. Meanwhile, according to a Goldman Sachs report, there will be one more peak in spot rates during the fourth quarter this year, followed by a gradual decline, as the industry’s driver shortage is slowly mitigated by accelerated hiring, reports Freight Waves.

Communicate Your Way to Better Truckload Management

Good, clear communication is a key factor in taking advantage of pricing change opportunities, according to trucking management company Cerasis.

To tackle the challenge of capacity crunch, “[s]hippers should provide as much information as possible and complete the order tender process as soon as possible,” writes Adam Robinson in a Cerasis blog post. “Although everyone claims full truckload only depends on lane and destination, drivers may take into consideration factors that affect GRIs in other modes. Therefore, informed shippers can take greater control over the process.”

Pressure on the market is not going away, says Malenfant, which means that logistics, traffic, and operations managers need to understand what the market is doing and why. In his webinar, “How to Estimate and Manage Truckload Pricing in 2019,” Malenfant shows attendees how to capitalize on the latest industry trends and make the kind of informed, smart, and strategic choices that will separate winners from losers in the coming year.

To join the conference or see a replay, order a DVD or transcript, or read more
error: Content is protected !!