As we enter the summer months, truck rates are reaching unexpected highs. Or at least, the truck rates seem high until you start digging below the price point.
Truck Rates Spiked Due To Agriculture
Across the country, we are entering a period of harvest. Truckers need to transport berries, grain, and other produce to places throughout the United States to enable sales to customers. However, due to the mandate for electronic logging devices, there is more pressure on drivers and fleet owners to get these goods to their destinations quickly and efficiently. The limited hours of service, along with demand for capacity loads, have helped to drive of truck rates by $1000 for businesses nationwide.
One of the biggest setbacks in delivering agricultural good on time has been roadside checks. Since April of 2018, truckers have been stopped to check if their ELDs are compliant and working. Truckers who fail to meet the standards are put out of services until such point as they can pass a check specifically for trucks. During the second week of June, the Commercial Vehicle Safety Alliance performed its International Roadcheck. In response to the check, smaller fleets pulled their vehicles from service. However, the checks are driven by the ELD mandate, which caused a cascade of costs for everyone across the board.
Since truck rates have spiked in June, the increased expense is funneled down to the consumer. Truck rates increase, the demand for products also increases, and the shortage of drivers means available trucks are in great demand. Trucking companies are raising their rates because they are in control of shipping, and because the increased pressure on truckers to handle multiple cross-country loads has risen tremendously since the start of 2018. If there is an increase in truck rates, businesses will most likely incorporate the extra cost into the price tag at stores. Ultimately, the consumer may end up paying more for produce this year, to offset the cost of shipping. Fortunately the agricultural industry is pushing for more allowances on the ELD mandate because, as opposed to hard goods such as cars and electronics, produce absolutely needs to be at its destination on time. Truckers should not be expected to maintain the health conditions of live animals, nor to care for fruits, vegetables, or other perishables that must get delivered in a very short period of time.
Express Freight Finance specializes in invoice factoring for the trucking industry. We understand the challenges of hiring additional drivers, acquiring vehicles, and making shipments quickly. We help to get fleets and owner operators the financing they need from unpaid invoices. Contact our offices today to get started.