U.S. Trucking Market Continues to Experience Market Volatility
As you enter the 2018 transportation budgeting process, we’d like to provide insights into some of the challenges our industry is facing as it relates to the U.S. trucking portion of the supply chain. The market is seeing significant challenges in securing qualified, over-the-road transportation and expect that the cost for these services will be adversely affected as the overall demand for U.S. truck power exceeds market availability.
Among the contributing factors to this market volatility are:
Driver Shortages – This has been an ongoing issue. According to the American Trucking Association (ATA), while the driver shortfall is approaching 50,000 positions for this year, it’s on trend to grow to more than 174,000 by 2026.
Increased Government Regulations – The Dec. 18 implementation of the federal regulation requiring truckers to use electronic logging devices (ELD) to monitor limits on driving hours is fast approaching. Despite the looming deadline, as many as 1 million of the nation’s 3.5 million truckers have yet to prepare for the new rule, adversely impacting options for driver and carrier capacity.
Increased Cost – An early start to the fall peak shipping season and economic damage and drain caused by hurricanes Harvey, Irma and Maria have also impacted demand and added to the upward pricing trend.
Despite these industry-wide challenges, Crowley continues its commitment to partnership with our core carriers to mitigate further cost increases, while maintaining high levels of service and safety.
As begun in October 2014, we will continue to monitor inland costs utilizing the CASS Index. However, due to the volatility we see in the trucking market we will move from quarterly to monthly adjustments to provide more fluid and accurate updates. If the indexes increase or decrease by more than 2% from the baseline amounts, we will announce the change and adjust the inland component or tariff and contract rates by an equal amount 30 days later. The current Baseline for Truckload remains 125.2 and Intermodal Rail 128.6. The full CASS history can be viewed here.
We appreciate you choosing us to be your total supply chain solutions provider. We will continue to actively monitor this market volatility and provide you with the best and most reliable capacity. If you have any questions, please contact your sales representative or the Customer Care Department at 1-800-CROWLEY.