Contract Rates Going Up in 2018 as Carriers Gain Strength
A confluence of historic trends and external events are impacting 2018 contract rate discussions that traditionally begin this time of year among carriers, shippers, logistics houses and consultants.
Indications are strong that average rates will increase, though executives involved in the negotiations prefer to discuss a range of percentages instead of specific numbers. Prospects for an increase range anywhere from 2% to 10%.
Executives agree that rates will rise, due largely to the industry’s shortage of drivers, estimated at 50,000 by American Trucking Associations Chief Economist Bob Costello. But there are a slew of other factors pushing rates higher. The shortage is influencing capacity rates that stood at 90% in the second quarter, as reported by Costello, and at 95% more recently, according to FTR Intel. The word is that capacity is closer to 100% as the holidays approach.
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