08 Nov From the Summit Week of 11/4
Summit Expedited’s newsletter featuring current market trends and other exciting news at Summit.
No Rate Spike (Yet) as Holidays Approach
The truckload market has been hard to predict in 2019. At the beginning of the year we were thinking rates would still climb as we experience in 2018. As we now know looking back, that was not the case. The market became more balance and rates steadily dropped. As we approach the holiday season we typically anticipate a capacity crunch and a slight increase in rates. As you can see below we have yet to see the market react this way. Currently rates across our three main modes are down, with dray van currently at an average of $1.78 per mile, which is 13.6% lower than this time last year.
A main factor in these lower rates is the decrease in loads to truck volume. In 2018 capacity was tight across the country, but it has evened out greatly since then. The current Load-To-Truck ratio for spot market dry vans is down 23.5% from last year, helping push rates down. We would still anticipate some type of rate increase as shippers push out their seasonal products, but only time will tell.
Moving Into Q4
Predicting rates can always be a challenge since the truckload market is influenced by many variables. As we approach the end of the year, we should be keeping an eye on two upcoming events which will impact our industry:
First is the finalization of the ELD Mandate. We felt the preliminary effects of this mandate throughout 2018, as the first stage was put into effect on December 18th, 2017. On this date the mandate took effect, but still “grandfathered in” any vehicles using AOBRD systems. On December 16th, 2019 AOBRD systems will no longer be accepted and all vehicles must be equipped with a true ELD system.
Second is going to be IMO 2020. This is a new regulation going into effect January 1st, essentially controlling the amount of sulfur allowed in diesel being used within the maritime industry. Although not the same as the fuel used in OTR trucking, it will likely cause a volatile market for diesel products overall.
We are unclear to what extent these two events will impact the truckload market, but they should be on your radar when forecasting the next quarter and into 2020. They will likely bring a capacity crunch and elevated fuel rates.
The Language of Freight
At Summit Expedited, we are proud to employ a diverse work force bringing with them a variety of multicultural backgrounds. From National Account Executives, Customer Service, Carrier Sales Representatives, and Managerial Roles Summit has employees that fluently speak, Spanish, Polish, Russian, Ukrainian, Serbian, and even Korean. Because of the language diversity here at SEL, we can extend our reach in coverage and bridge gaps to provide a more competitive service to our customers.