Truckload Authority - Winter 2014/15

Truckload trends crucial to you and your business @ DAT.com
T
he latest news on the economic
front shows 3.9% GDP growth
in the 3rd quarter, the second
consecutive quarter of the strongest
economic growth since the recent
recession. The economy is also
recovering from last year’s disastrous
winter, when truck shortages led to
market rate increases of more than
10%. Contract rates also rose after a
long period of stability.
Far-Reaching Regulatory Changes
in 2013 – New EPA regulations and
ultra-low sulfur diesel hurt fuel economy
and engine manufacturing expenses
rose, while costs soared for tires and
other supplies. Hours of Service (HOS)
changes in mid-2013 also hampered
driver productivity, leading to wage
increases that may or may not stabilize
the outflow of experienced drivers from
the industry.
Impact of Pre-Existing Regulations
- Driver recruitment and retention
were also affected by CSA safety
scoring. CSA considerations helped to
boost driver turnover levels back above
100%, as companies seek to shed
drivers with poor scores and recruit
drivers with above-average scores.
Environmental regulations from the
California Air Resources Board (CARB)
increased operating costs on trips to/
from and within California, home to the
country’s two largest ports, its largest
agricultural centers and many important
freight markets. As the economy
improved, drivers and prospective
drivers sought work in the higherpaying
sectors of construction and
energy exploration. Driver shortages
plague fleets of all sizes, making it
difficult to expand when currently
owned equipment lacks drivers.
Freight Rates Become
Unpredictable - Most transportation
and logistics professionals pride
themselves on their ability to set
pricing and anticipate costs. Recent
events, including changes in the
regulatory and economic environment,
as well as weather, have confounded
the most sophisticated pricing models,
however, as they depend on extended
trends in historic data. DAT has been
In partnership with
Growing Economy Reshapes Freight and Rates
By Mark Montague
better able to track conditions through
load board metrics and rates that are
updated daily based on shorter time
periods.
Market Rates Rise 10% vs. 2013 -
Market rates are up more than 10%
in 2014, year-over-year, as a national
average, and that’s led to rising
contract rates. Shippers have reported
jumps of 5% or more, as carriers rebid
the same lanes at a higher rate.
DAT RateView Supports Long- and
Short-Term Pricing Strategies - Even
the most experienced transportation
pricing analysts are challenged by the
current environment. They would like to
rely on their own companies’ historical
pricing data, but recent rate behavior
has made it difficult. DAT RateView
tracks rates daily on tens of thousands
of lanes, for van, reefer and flatbed
freight movements. The carriers can
compare their internal pricing histories
with the prevailing rates in each lane
to assess what the market will bear for
a single move or to construct bids on
long-term contracts with shippers.