Transportation TIP List: Week of February 18th, 2018

Posted - February 21, 2018

This week, the nation observed President’s Day to honor the leaders of the past that have helped construct the foundation of our country. And this week’s TIP List shares some of the trends shaping the future of transportation – including the ELD mandate and how it is impacting driver productivity, and a potential increase in transportation costs currently faced by shippers. Read on for the full rundown of influential supply chain developments!

  • Why U.S. Shippers Must Rethink Transportation Practices: 2018 promises to be a great year for U.S. truckers. The demand and supply imbalance is shaping up to be of the kind not seen in last 20-plus years, and spot market rates are up double digits, even exceeding 20% over the last few months. It’s no surprise that shippers are fearing a huge increase in transportation costs.
  • Only So Many Hours in the Dry: The ELD mandate, which took effect Dec. 18, could result in a conversion of highway traffic to rail if businesses believe that OTR drivers may not be able to meet delivery targets. The ELD rule is expected to cut driver productivity by 3 to 10% as drivers are now forced by technology to stay within federal HOS limits.
  • Trucking Rates Come Down a Bit but Problems Persist for Shippers: Rates on the spot market, where companies book last-minute transportation, have come down from record highs hit last month amid a nationwide shortage of available trucks. Shippers have postponed deliveries that aren’t urgent or are moving more cargo by rail, reducing pressure on trucking fleets struggling to hire drivers.
  • Signs of Spring in Flatbed Markets: Flatbed trends have been mostly neutral so far in February. There are signs of spring, with higher volumes in many markets over the course of the past three weeks; but that’s been offset by a slump in volumes out of Houston. The price for oil has also gone from above $65 to below $60 per barrel, which could help account for the decline in demand.
  • Panjiva Points to Strong Import Growth to Start 2018: January shipments, at 1,006,861, were up 7.7% annually compared to 934,447 in January 2017. This marks the fastest rate of growth in a month going back to April 2017, as well as outpacing the cumulative 4.1% growth rate for all of 2017, which it noted was a record year for U.S.-bound shipments in aggregate.

 What supply chain trends are you seeing lead the way?