Note: Today’s post is part of our “Editor’s Pick” series where we highlight recent posts published by our sponsors that provide practical knowledge and advice on timely and important supply chain and logistics topics. In this post, Steve Raetz, Director of Research and Market Intelligence at C.H. Robinson, highlights 8 trends that will have an effect on the truckload market this year.
What is normal for the truckload industry? That may seem like a difficult question considering how rapidly things change in our industry—especially in the last calendar year. But there are several trends presenting themselves that will help us redefine what “normal” means for truckload in 2018 and 2019.
Below, we explore 8 trends that will have an effect on the truckload market in 2018.
1. Efficiently utilizing capacity
Since around 2011, when the recession started to improve, we’ve gotten used to seeing extremely efficient use of for-hire capacity. According to FTR Transportation Intelligence, it’s been common to see truckload utilization over 95%. It appears this trend of hyper-efficiency will continue.
Keep in mind that this level of efficiency leaves little elasticity in the market. When securing transportation, you’d do best to align your favorable freight attributes with carrier goals.
2. New trucks entering the market
In 2018, FTR Transportation Intelligence expects 60,000 more trucks will enter the market than are needed to replace retiring trucks. What’s not clear is if these strong truck sales forecasts will add capacity or primarily serve as replacement capacity. Incentives for carriers to purchase new trucks include better fuel economy, lower maintenance costs, higher reliability, and improved driver recruitment and retention.
While larger and medium sized carriers most commonly purchase new equipment, they may not be able to hire a new driver for each new truck, limiting the actual incremental growth to the fleet. Smaller carriers purchasing used trucks may be able to recruit friends and family members to join the business during these strong economic times.