Despite last year’s turbulent first half — and relatively difficult 2015 and 2016 in terms of rates — the second half of 2017 ended quite impressively for truckers.
After the implementation of the ELD mandate, market conditions aligned to favor truckers, resulting in their contract rates improving significantly. Forecasters are predicting the rates to continue strongly until at least the middle of this year.
Now that fleets and owner-operators have equipped their vehicles with electronic logging devices, not only can they enjoy the improved market conditions, but they can also leverage the benefits that ELDs can bring to their operations to minimize their expenses and increase revenue.
Market demand report
According to DAT Analyst Matt Sullivan, because the ELD’s implementation date coincided with the increased market demand caused by the pre-Christmas freight rush, as well as several operators going on vacation, measuring the full effect of ELDs on market demand can prove to be difficult.
“The new regulation and the holiday push definitely made for an even tighter market, though,” he mentioned. “And the national load-to-truck ratio for vans hit its highest number ever. As a result, rates were up pretty much everywhere.”
A significant rise in the load-to-truck ratio
The national load-to-truck ratio for vans was a whopping 10.1 loads per truck.
The groundbreaking increase was due to several reasons: the high market demand for the holidays, numerous drivers who went on Christmas vacation, and the newly implemented ELD mandate.
A bunch of scenarios led to the unusually high load demand during the pre-Christmas week — with last-minute holiday gifts being one of the contributors. As a result, almost every major market experienced an increase in their van rates during the third week of December.
Among the top 100 van lanes, 82 lanes saw an increase in rates. The rates peaked nearly everywhere, except for Chicago and some markets on the West Coast that had higher points back in November.
The pre-Christmas demand added more pressure on rates in the Eastern part of the U.S. However, some areas in the Northeast and Midwest were quiet on December 22, 2017.
Dallas had the best gains with their outbound rates up 7% on average. Other areas with some of the best results were Philadelphia, Atlanta, Allentown, PA, and Columbus, Ohio.
On the flip side, Seattle’s market experienced an outbound decline during the third week of December. Despite that, their average rate was still 50 cents higher than Denver’s outbound average.
The reefer overview
Even before Christmas, reefer load counts were already up significantly. That could be a sign of the last-minute shipments made ahead of the holidays. The volumes for big produce markets like Florida, Texas, and California were exceptionally high. Just like with dry van freight, reefer rates increased almost everywhere due to tight capacity.
Dallas experienced great gains as well, similar to the improvement they saw with van lanes. Their outbound rates went up 13%, and the lane from Dallas to Denver soared 53 cents to $2.58 per mile.
California also enjoyed considerable rate increases. The lane from Sacramento to Portland, Oregon went up 91 cents to an average of $3.78 per mile.
Green Bay, Wisconsin had a slow week, however. Their rates and volumes were significantly down.
After the ELD mandate implementation, the market conditions are favoring truckers. The trucking industry is expected to see more growth in the near future. Truckers without ELDs, however, may not experience the same level of growth and business opportunities, as — apart from compliance and improving road safety — ELDs also help carriers minimize their expenditures, improve productivity, and increase profit.
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