Trucking Houston| Texas Global Services
Trucking has a shortage right now. There is a large load to truck ratio. For instance, flatbeds are at 36:1. There are several reasons for the truck shortage. The oil companies have been purchasing last minute and not scheduling regular rail shipments and utilizing trucks. Increased Outputs in Manufacturing and Construction contribute to the added need to move products. Truck carriers are able to hold out or require higher rates as the bridge between supply and demand widens in 2018. Increase in manufacturing? That’s right. You might be noticing more and more products with the “Made in America” distinction. This is no accident. American manufacturing output increased 7% in the fourth quarter of 2017, and companies are planning on increasing production in American factories. These production increases create more demand for truck capacity, especially for flatbed and specialized carriers. Keep in mind, that freight considered oversize, heavy haul, flatbed and open deck loads are not classified the same as standard dry van trailers (the standard box-like trailer you see on the road). This means that the ratio of loads-to-trucks isn’t going to be the same for all trailers thus, rates will be different as well. Diesel prices are high and an increase can be catastrophic to carriers that are already paying over 20% of operating costs at the pump.
So in conclusion, what we are seeing is shippers wanting to pay less due to their costs and carriers raising their rates due to too much business not caring to expand liking the higher prices and the brokers are stuck in the middle. We go up to bat for our truckers but the carriers are squeezing them out. Everyone knows how much a cheap price can cost you. You get what you pay for and trucking isn’t any different. The price wars will be interesting to see play out. Stay tuned to our blog for more details.
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Domestic Trucking | Texas Global Services
6046 FM2920 #307
Spring, TX 77379