TL;DR:
(Hey, we know you’re busy. So here’s just the highlights)
The trucking industry is rebounding, evidenced by a six-month high in tender rejections at 4%. A steady rise in freight volumes and a sudden 26% uptick in rejected tenders signal fewer trucks are available to move goods. As carriers leave the industry due to low rates and high operating costs, shippers should brace for an inevitable rise in freight rates. Trust TLC to guide you through these shifting market conditions.IN FULL:
The trucking industry is seeing significant signs of recovery, and at TLC, we are here to break down what this means for you. According to FreightWaves, the Outbound Tender Rejection Index (OTRI), a barometer for supply and demand in the industry, has reached a six-month high at 4%. Additionally, the Outbound Tender Volume Index (OTVI) indicates that freight volumes have been steadily rising, with a 12% uptick over the last six months.
However, what’s more telling is the change in capacity. Just in the past 30 days, tender rejections have surged by 26%, while volumes increased by only 1%. This suggests that there are fewer trucks available to move goods, as carriers both large and small exit the market. Operating costs are a significant concern; truckload spot rates have ranged from $1.50 to $2.10 per mile, putting pressure on carriers whose break-even costs are closely aligned.
The rising diesel prices have only intensified these operational challenges. Looking ahead, higher freight rates seem inevitable, given the current supply and demand dynamics. Shippers who have enjoyed lower rates may soon face the cyclical nature of the industry and should consider locking in contract rates.
In these changing times, you can count on TLC to navigate the complexities and ensure a seamless logistics experience.
