Trucking Demand Spikes: Prices and Availability are Unstable
The trucking industry has experienced its share of highs and lows in the last ten years. The 2008-2009 recession hit the industry hard. In 2014, the US economy expanded at its fastest rate to that point following the recession, and was so significant, it remains a point of comparison. A two year economic soft patch ended in early 2017, but there was no predicting just how high the demand for tuckers would get as the year rolled forward.
Truckstop.com released the Market Demand Index revealing an all-time high the week of September 17. It rose 3.9 points (10%) from the previous week, raising it 214% year over year. The chief relations officer at truckstop.com, Brent Hutto, calls the increase “crazy,” stating “The volumes of freight in the spot market this year are already above where we were in 2014. Rates are up 20% on average. There’s more freight per truck available than ever.”
The recent hurricanes seem like obvious contributing factors, but they really only exacerbated already surging freight volumes. Housing and construction, consumer spending, and manufacturing output have all been responsible for the rapid growth in demand.
Demand is not the only reason that shipping costs will continue to rise. The deadline for the electronic logging mandate is December of 2017. The Electronic Logging Device (ELD) mandate that was passed in 2015 is part of the 2012 “Moving Ahead for Progress in the 21st Century” bill. Fleets have until December 2017 to implement certified ELDs to record hours of service. This should ultimately provide financial benefits to carriers, but for now, it is a cost and inconvenience that seeps down to the consumer.
While the hurricanes didn’t cause the demand in trucking, they certainly guarantee some longevity to the trend. As such, anyone who uses trucks for shipping may want to reevaluate their packing methods to ensure costs are as low as possible.
Two things to evaluate in this process are A) the materials used for the containers, and B) the space your products or components take up.
We’ve written a lot on varying materials for containers because of the low supply of softwood lumber. You might be able to find another material that costs you less than what you’re using now. Also, if it’s possible to create a reusable packaging system, you will save even more over time.
Space is sparse, and you also want to spend on the fewest trips necessary. Take a look at the inside of your packaging. Is there a lot of wasted space? Are your contents protected adequately? What about the amount of space your container or pallet fills? Can you optimize that to fit more into the same amount of space?
Packnet has the experience to quickly identify opportunities for you to save on packaging. Whether it’s standard or custom, we can help you adopt a long-term solution that will remain cost-effective. With the right packaging process and container, you can offset the spikes in trucking costs and other unpredictable factors in the supply chain. Fill out a free assessment or call us at 952.944.9124.