After 'Big Bang' in 2018, trucking market corrects
- The capacity crunch that dominated the trucking market in 2018 is nearing its end as shippers and carriers alike are adjusting their operations to experience a more stable 2019, DAT Solutions projected in its 2019 Spot Freight Roadmap.
- "In 2018, fleets bought record numbers of trucks and made operations driver-friendly, adding capacity and market share that will serve them well in 2019," the report reads. Shippers, meanwhile, contracted additional capacity for the new year in December, leading spot rates to fall that month for the first time since 2012.
- "That's a trend we expect to carry over into 2019, with shippers paying a 3-5% increase on for-hire trucking contracts in order to secure capacity," Matt Sullivan, editor of DAT Carrier News, told Supply Chain Dive in an email.
Last year proved a "Big Bang" for the trucking industry, according to DAT, as effects from the ELD mandate, a boom in economic output, natural disasters and tariffs combined to make 2018 "the most explosive freight bull market on record."
DAT expects spot rates to peak in June this year, signaling a return to normal. "In many ways 2014 set the seasonal patterns that we saw repeat every year up until 2018, with a Q1 dip followed by a strong Q2 rebound," Sullivan said. "Our projections show the same trend for 2019."
However, market uncertainties may still throw the market off its stable course.
Declining oil prices may throw a wrench in the industry. New drilling creates significant truckload and flatbed demand. But when the price of oil drops, "that activity slows, which in turn leads to less truckload demand," Sullivan said.
The DAT report also noted regulatory activity in 2019 could have additional unknown effects. "The uncertainty around trade agreements and tariffs makes volumes in and out of the ports a big unknown at the moment," Sullivan added.
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