In a recent webinar by FTR, analysts predicted that both spot market and contract rates would continue to remain high throughout 2018.
Ever since the implementation of the ELD mandate, the trucking industry has been experiencing a record-tight truck market and extraordinarily high rates. According to FTR analysts, the situation is expected to remain the same at least until the end of this year.
“Rates are not going to be going down probably for the next year. They are high and headed higher,” says Avery Vise, Vice President of Trucking Research for FTR.
According to the latest data, reefer’s per-mileage average — after gaining momentum in April — has increased by 21 cents in June, pushing its per-mile rate to $3.02 per mile. Van rate has jumped up to $2.73 per mile, which is a 35-cent increase in the last three months. Flatbed’s per-mile average has also jumped up to $2.88 per mile. It’s a 55-cent increase from the same month in 2017.
Driver shortage and the prevailing market conditions for shippers are some of the other points that Avery Vise discussed in FTR’s State of Freight webinar. Co-hosting the webinar was senior transportation analyst Todd Tranausky.
Spot market and contract rates are highly dependent on the available capacity. If the demand for freight outweighs the supply of trucks and capable drivers, rates increase, which is the case right now.
“It’s really just a very tight market,” says Vise. “There’s a lot more freight than capacity.”
Driver recruitment and retention woes continue
While freight demand is projected to remain high in the upcoming months, capacity is expected to dwindle, as the driver turnover rate for large truckload carriers has climbed to 94 percent.
According to Bob Costello, American Trucking Association’s chief economist, the increase in driver turnover is fueled by multiple factors, including driver recruitment and retention problems.
ATA’s Trucking Activity Report shows that the annualized turnover rate for fleets with more than $30 million in revenue increased by 20 percent compared to Q1 2017.
“The tight driver market should continue and will be a source of concern for carriers in the months ahead,” says Costello.
Solving the driver retention puzzle
Driver pay, which was considered a big reason for driver shortage and driver retention problems, has increased over the last few years. According to the Driver Compensation Study, the median salary for a commercial driver has increased by 15% since 2013.
However, solving the driver retention problem is more than just increasing driver pay.
The 2018 Transportation Spotlight Report surveyed 1,000 executives and managers and sought their opinions on how they are planning to solve the driver retention problem. Here are the results of the survey:
- 61% respondents told that they intend to invest in retention programs.
- 58% think initiating training and development programs will help.
- 54% believe in increasing follow-up communication.
- 53% want to employ non-monetary tactics such as driver appreciation programs.
- 42% think that they can retain drivers by increasing their pay.
- 40% want to give performance bonuses a shot.
Apart from these ideas, having the right ELD solution would also help you significantly in your efforts to retain good drives. An ELD that isn’t user-friendly or compliant will negatively affect drivers.
According to our latest survey, approximately 73% of drivers face one or more ELD issues per week. On the other hand, 80% of drivers told us that they are very happy with the KeepTruckin ELD solution and are 6x more likely to recommend KeepTruckin to a friend.
If you are looking for a feature-rich, compliant, and reliable ELD solution for your drivers, try KeepTruckin.
If you have any questions about the KeepTruckin ELD or the KeepTruckin buyout program, give us a call at 855-434-ELOG or send us an email at firstname.lastname@example.org.