12 Dec From the Summit Week of 12/16
Summit Expedited’s newsletter featuring current market trends and other exciting news at Summit.
A Hot Market for the Holidays
The market has remained very steady for a majority of the year, but the Holidays have brought an anticipated jump in rates and crunch on capacity. Rates are higher than we have seen in some time for both reefers and dry vans. Dry van spot rates have climbed to $1.93 per mile and reefer rates are currently at $2.25 per mile.
In addition to the annual rise in demand we see every holiday season, there are multiple factors we will be facing in the near future which differentiate this year from the past.
Final phase of the ELD Mandate is closing in fast. The final day for carriers to adhere to the new ELD regulations is today, December 16th. Although a large number of carriers are already in compliance with the new laws, there will be some companies that have not made the required updates and will be put out of service. This additional drop in capacity may add to the already elevated rates.
As many of our readers likely already know, Celadon has filed for chapter 11 bankruptcy. Along with that comes over 2,700 power units that will no longer be moving freight across the county. We have already seen some of their previous loads trickle into the spot market, and we believe this will continue to happen. These previously “covered” loads will pull a large chunk of the available spot capacity off the market.
IMO 2020, which we have mentioned in previous newsletters, is set to be in effect starting January 6th. Although this is not going to be directly impacting diesel fuel in trucks, its putting new stipulations on the fuel used by cargo ships. In return this will affect the entire diesel industry, likely increasing diesel rates overall.
Lastly, California will be implementing new regulations for independent contractors. The new rules make it nearly impossible for owner-ops to lease onto a carrier. These owner ops will be forced to be hired on directly by a trucking company, running under their own authority, or possibly moving out of California.
With these big factors occurring all at the same time, it is hard to predict exactly how drastically the spot market will react. If you have freight that is ready to ship, it may be better to get it moving now before these events take place, allowing you to buy at more aggressive rates. As always, let us know how we can assist in positioning yourselves for a promising New Year!
Summit Holiday Giving Tree
Summit has begun another charity initiative this holiday season! Our giving tree in our Chicago office has sprouted the names of many team members who are donating various toys, gifts, and other items to the Lurie Children’s Hospital. This non-profit medical center provides care for patients and supports their families while searching for life saving cures. We already have 15 donors and are gaining more each day! Summit enjoys any opportunity to give back and helps those in need especially during the holiday season.