BLOOMINGTON, Ind. – The economy continues to be strong, with spot rates, employment rates, and load postings all reaching record-setting levels in the last several weeks, but trucking is still susceptible to coming changes say industry analysts.
Vice president, trucking research at analyst firm FTR Avery Vise says carriers can expect the market to continue to be near full-capacity for the remainder of the summer, but changes coming to allow more flexibility to Hours of Service (HoS) regulations, labor issues, and trade negotiations may contribute to a softening of the market towards the end of the year.
Week 23 of the year saw a record number of loads posted, although Vise attributes that in part to the annual CVSA International Roadcheck conducted from June 5-7, saying some drivers would have chosen the week as the perfect time to take a vacation, decreasing capacity.
FTR says it sounds like a broken record repeating the same market conditions month and month, but the trouble fleets continue to have with driver hiring and retention will mean an at- or over-capacity market for the next quarter.
The supply-chain is expected to adjust to the situation eventually, bringing about changes that will soften the market modestly towards the beginning of 2019.
Meanwhile aggressive recruiting efforts over the last 12 months have meant some good news on the hiring front with the addition of more than 24,000 new employees to the industry.
There was a minor downward trend in driver retention in April, which FTR attributes in part to
“We think that labor tightness has gotten to the point where the economic rules are changing somewhat,” says Vise.
Trucking isn’t the only place labor is tight, with a workforce-wide unemployment rate that hasn’t been lower since 1969.
Canada had an unemployment rate of 5.8% in May, while south of the border it’s sitting at 3.8% – a rate generally considered full employment by economists.
Vise says while normally full employment would mean higher production rates and more spending, this time around it might just mean higher inflation.
Recent clarification on HoS rules by the Federal Motor Carrier Safety Administration (FMCSA) has added flexibility in the rules for personal conveyance, parking, and the 150 air-mile exemption for agricultural haulers. That flexibility may provide a little breathing room for drivers and fleets under pressure, and those changes are expected to continue.
Vise says the FMCSA may be doing some data collection into split rest periods, in addition to continuing consideration of exemption requests to the ELD mandate.
Combined with on-going trade problems between Canada and the U.S. there’s uncertainty in the marketplace, but fleets probably don’t have much to worry about.
“Directionally it’s doing what it normally does.”
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