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Truckload pricing could rise 4% this year: FTR | Truck News

BLOOMINGTON, Ind. – Trucking rates in the US will increase by about 4% this year, according to a projection from industry forecaster FTR.

In its monthly State of Freight webinar, FTR transportation economist Noel Perry, said truckload contract rate increases could take hold as early as the first quarter of this year. The spot market is four times as volatile, he noted, meaning spot market prices could swing as high as 15-20%, “so there is real exposure if you’ve got a lot of spot market business.”

Perry also said there’s about a 60% chance of a “major truck shortage” in the next four to six months. This is being driven by a tightening of capacity that’s expected to occur as fleets install electronic logging devices (ELDs) ahead of the December 2017 mandate. Capacity utilization sits at a bout 97%, but could exceed 100% this year or next.

“If utilization gets above 100% there’s going to be some real stress in the marketplace,” Perry said. “That is why our pricing forecast is going up.”

FTR does not expect the incoming Trump administration to derail impending regulatory requirements such as the ELD mandate.

Examining downside risks to the economy, Perry noted the global economy remains weak and that the US economic recovery is “getting very stale.” It is one of the longest recoveries in history.

“We are increasingly concerned in 2018-2019 of the chance of recession,” Perry said. “What that means to truckers is a price drop of 5-10% and a drop in volume that’s about the same.”

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Truckload pricing could rise 4% this year: FTR – Truck News.

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