Shippers in a tight spot on rate negotiations: Rising rates and climbing fuel prices prompted FTR’s Shippers Conditions Index to plunge in August, FTR reported last week. With spot market rates soaring in recent months, pressure is mounting in the contract market, FTR notes, with carriers expected to force rate increases on shippers through this year and into 2018.
“Shippers are in a tough position right now,” says FTR’s Jonathan Starks, chief operating officer. “We have known for some time that the trucking industry has been operating with very little excess capacity. However, the weak pricing environment masked that phenomenon for the last year. Hurricanes Harvey and Irma exposed shippers to this new reality. There just wasn’t enough excess capacity to deal with spikes, and the result was a significant spot market pricing gain that persisted through early October.”
“When you couple the Hurricane impacts with increased freight demand and the fast approaching ELD implementation, there’s a real fear that loads won’t get delivered. This is already beginning to show up in the contract markets. Spot prices were the canary in the coal mine. Contract pricing is likely to show significant gains through most of 2018.”
Trucking employment nearly unchanged in October: Total employment in the for-hire trucking industry fell by 100 jobs in October, according to the Department of Labor’s monthly Employment Situation Report.
Related: Trucking Jobs