The Top 7 Stories in Freight
Here’s what’s happening this week:
- Capacity blinks as load-to-truck ratios take a welcome dip
- A new administration will bring more trucking regulations
- Industrial volume jumps expected to add to the capacity blues
- HOS win sends strong message to states trying to pass interstate regs
- Cass Freight Index indicates freight rates will be ‘all gas and no brakes’
- 50% of shippers look to new suppliers to avoid future disruption
- ELD data is fueling carriers to change driver pay structures
The hottest stories in freight can be found here, in the Weekly Freight Report:
1. DAT shows welcome dip in load-to-truck ratio
It’s the stat of the week: load-to-truck ratio is 3.63… down from historic highs of 7.03 at the start of Jan… But even with this welcome dip, rayios are still well above 2019 and 2020 values. This means capacity is still thin… and van prices will remain high. Check out the DAT trendline here.
2. Future regulations under a new administration
New year… new administration… and new laws. Potential new regulations are on the horizon and will affect truckers and shippers this year. What’s on the table? A nation-wide AB5 law, minimum liability hikes and mandatory speed limiting device equipment for class 8 tractor-trailers… Read up on all the potential regulations here.
3. Industrial volume jumps will add to capacity crunch
Even after a surge in retail volume, overall truckload volume is down 4% year-over-year because of lagging industrial freight. But that’s expected to change mid-year… and it will only add to the capacity crunch. Unless there’s an unexpected consumer goods dip, shippers should expect pressure from rising prices to continue. Read the story here.
4. Strong message for states passing interstate regs
It’s a win for trucking. The US Court of Appeals for the Ninth Circuit ruled against the state of California’s additional meal and rest break (MRB) rules. Calling them “additional to or more stringent” than federal regulations, the court claims they cause an unreasonable burden on interstate commerce. Trucking associations hail the victory as the decision upholds the DOT as the sole regulator of interstate trucking and prevents states and trial lawyers from creating competition rules. Get the full details here.
5. 2021 freight rates may start sizzling
They’re referring to freight rates as “all gas, no breaks” after the Cass freight expenditure index jumped 13% year over year. More notable is the rapid price increases as the Cass “implied freight rate” chart rose 6% year over year. To put that into context, this means rates are growing way faster than shipments. And new legislation is expected to boost GDP. This means increased freight volumes and of course, price. Get the details here.
6. Manufacturers prepare for future disruption
After a disruptive 2020, manufacturers are looking ahead to remain vigilant. New surveys show that 50% plan to identify backup suppliers to avoid disruption. Tech and reshoring investments are also on the table. But before jumping all in, companies want to evaluate their short and long-term goals and evaluate what the future may hold under a new administration. Get the details here.
7. ELDs are fueling the way for restructured driver pay
To combat the driver shortage and attract talent, carriers are investing in increased wages, bonus structures and tech for drivers. Thanks to ELD data, fleets are changing the pay model so mileage is no longer the most important factor when paying drivers. Time-based models are becoming the new norm… and the results… as much as a 17% wage increase for drivers. This is good news for shippers as this will lead to a more sustainable driver pool and ultimately lead to more capacity. Get the details.
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