Navigating A High-Capacity Market
An outlook on shipping in 2018
With the ELD mandate around the corner, the perking economy, the continued driver shortage, we are expecting an increase in carrier rates as we move forward and into 2018. In fact, over the past two months we’ve seeing a spike that we hoped was only temporary. However, spot rates continue to exceed contract prices over the last few months in all three modes (dry van, reefer, flatbed) due to strong demand and rising fuel prices, according to DAT. With online load boards reporting record-high load postings, shippers will continue to depend on brokers in this high-demand market to find capacity. And don’t forget about rising fuel rates. The average $2.91 per gallon of diesel last week was $.49 higher than a year ago, which drives up carriers’ costs.
Moving into 2018, those trucks that still haven’t installed an ELD will be put out of service on April 1, 2018. It is estimated that close to 1 million trucks still haven’t completed the Dec 18th required deadline. Some industry experts estimate the mandate could push out 3-5% of our industry’s capacity. While the majority of carriers are implementing an ELD (although begrudgingly) some veteran owner-operators could decide to retire early while others could move over to larger carriers so they don’t have to bother with it. Gone are the days of any wiggle room in a driver’s hours and shipments could be delayed when a carrier is out of hours and has to break. Carriers will have to be compensated for loading dock delays and will expect a premium for next-day service. We will definitely feel a difference in how we do business moving forward.
These are important topics and we want to make sure our customers are aware of these potential challenges. We’ve been navigating our ever-changing industry since 1983 and will continue to monitor the industry trends so that we can best serve you. At Westgate, we view challenges as opportunities to continually grow and refine our service.