COLUMBUS, Ind. – The surge in truck loadings seen in 2017 and into 2018 has begun to subside, and trucking’s growth is expected to slow in 2019, according to Avery Vise, vice-president of trucking for FTR.
Speaking during FTR’s State of Freight webinar today, Vise said “One thing we have seen recently is that surge that had taken place through almost all of 2017 and well into 2018 has begun to flatten out a bit. As we look forward, we anticipate that same type of trend. We certainly are not seeing the same level of growth that we saw before, but we are still seeing growth.”
FTR predicts contract rates will continue to rise, by as much as high single digits early in the year, before settling at about a 5% year-over-year increase or less beyond April.
“The most important thing is, we’re seeing a deceleration in the increase, which is the biggest point,” Vise said of rates.
Looking at the year that was, Vise also confirmed the electronic logging device (ELD) mandate did impact the industry’s capacity and productivity, especially since April when full enforcement began. He also noted there continues to be non-compliance in the industry, especially among single truck operators, which account for more than 20% of violations. Less than 1% of ELD violations are against carriers with 1,000 or more trucks, even though they represent 40% of the truck population.
Capacity utilization continues to be at nearly 100%.
“This has been the big headline of the year, if you had to pick one,” Vise said, adding it’ll be next year before the market notices any change in utilization.
Carriers in the U.S. have successfully increased employment by about 36,000 positions in the last 12 months, which Vise said is impressive since the unemployment rate is at a 49-year low.
FTR noted container shipments to the West Coast ports surged in October, suggesting shippers are pulling forward deliveries from China to avoid tariffs that could come into effect in the first quarter of next year. This could mean less freight coming through those ports in early 2019.
“A lot of this depends on exactly what occurs in the relationship between the U.S. and China,” Vise said. “We were looking down the barrel of a big tariff increase until a couple weeks ago.”
It remains to be seen if those products are being held in inland distribution centers or in the Southern California area, and how that will impact trade flow.
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