Trucking prices continued to rise this year, pointing to economic growth and momentum which will take the industry into 2019. Despite a perceived driver shortage, HOS and ELD mandates, revenue is once again favoring the trucking industry.
The Holiday Season Started Much Earlier
Most shippers made a mad dash to stock up on inventory before tariffs went into effect. As a result, the demand for truckers shot up dramatically over the course of the summer. Trucking prices saw an 8.8 percent year-over-year increase, and the need for capacity haulers overtook availability, causing a year-over-year increase in expenditures of almost 20 percent. The biggest effect of this increase is that carriers are in a position to influence trucking prices.
Reasonable Trucking Prices
While trucking prices are indeed on the rise and financial speculators spread doom and gloom over inflation, nothing is actually out of control. Fuel prices have not reached the highs they were at 13 years ago. Carriers may be raising trucking prices, but they are also expanding to meet shipper demands. Even the strain of the ELD mandate is taking a back seat to industry-wide expansion. Even the driver shortage has been replaced by carriers who have added jobs to meet the current period of economic growth.
Some people outside of the trucking industry are pointing to rising trucking prices as a signal that the current economic momentum is about to slow down or take a dip. Historically speaking, this is not the case. Rising trucking prices to not precede an economic downturn. In fact, quite the opposite is true. Trucking prices fall dramatically and job vacancies dwindle sharply before an economic drop, as we saw during the Great Recession of 2007 and every similar scenario before that. Since the trucking industry is the backbone of the economy, the current status indicates we are in a strong and growing economy.
The only major financial concern facing the trucking industry is the amount of revenue locked up in unpaid invoices. Rising trucking prices and better sales mean nothing if fleet owners cannot access revenue. Since most trucking invoices have schedules of a month or longer, that waiting period can prevent carriers from taking advantage of growth opportunities. To remedy this, carriers are using freight factoring to turn those unpaid invoices to cash within 24 hours.
Express Freight Finance is a national leader in freight load factoring. Contact our offices today to learn how we can unlock the revenue tied up in unpaid invoices.