A variety of seasonal and market conditions have impacted the domestic trucking market, one that has increasingly tightened over the recent months. Even with customers offering inflated rates for emergency or last-minute shipping needs, freight companies cannot meet the demand, citing a lack of drivers, and increasing volume demands across the United States. Here are just a few of the impending market conditions causing the trucking shortages today:
The Stability of Oil Pricing
Oil has stayed relatively steady, around $45-52/barrel, allowing manufacturers to forecast, plan and produce consistently. Additionally, there have long been plans for increased chemical production within the continental United States, coming into fruition in recent months. The increased chemical production comes with increased trucking and freight needs, adding to tightened availability.
A Snag with Rail
Though much information is not available, it is believed that there have been minor snags within the rail car system, that leads to more needs on trucking. For every rail car that would be coming out of a manufacturer to a terminal, it takes four trucks to cover the volume, substantially minimizing truck availability.
Growing Fracking Operations
Fracking operations are growing throughout the United States, leading to a bump in trucking requirements. Though oil is still at extremely low prices compared to relative years, it is something to watch in the freight industry as time goes on.
In the midst of warmer weather comes an increased need for shipping produce out of the South and Southeast, taking up some trucking capacity. Though it is a regular seasonal demand and capacity increase, it continues to add to the tight domestic freight market.
Shortage of Drivers, Despite Recruiting Efforts
Although carriers and recruiters are offering all-time high salary and benefit opportunities, they have not seen the returned interest in the trucking industry. A lack of interest in the industry has limited available trucks, not compensating for the truckers retiring from the industry.
Competitive Bids Not Followed Through
A recent trend has seen freight companies bidding on lines and trucking work, however once they win the bid, they find they cannot actually handle the capacity they thought they could, for a variety of reasons. This leaves manufacturers and customers struggling to find last-minute trucking capacity, in an already tight market.
Alex Azeredo, Vice President of Sales and Marketing for The Logistix Co, recommends a seven day lead time when seeking domestic trucking needs. “A seven day lead time allows us to find the available truckers for the route you need, and ample time for the trucking and freight companies to forecast upcoming availability.”
The Logistix Company prides ourselves on maintaining regular, professional relationships with trucking companies, truckers, logistics companies and others in the industry. These personal relationships allow us to keep our finger on the pulse of the industry, and continue supporting our customers in tougher, tight times such as these. For more information on our services, contact us today.