Market Update: Transportation Industry News
In the transportation industry, there are many moving parts that can impact your day-to-day operations. From monitoring carrier capacity and driver shortages to tracking diesel pricing and government regulations, staying current on the events in transportation means you will be better equipped to make knowledgeable business decisions and drive growth and efficiency into your supply chain. This month’s Market Update highlights key factors that impact the transportation industry in North America and will keep you up to speed on the latest news and topics that matter to your supply chain and business.
Large Scale Market Indicators
As the holiday season approaches, import cargo volume at the nation’s major retail container ports is expected to see a final surge.
Spot market rates continued on a seasonal decline in October. Though rates in all three segments—flatbed, temperature controlled, and dry van—fell, they continue to ride the coattails of a big upswing from February to June, which led to record high rates for all three segments.
U.S. gross domestic product (GDP) hit a 3.5% pace in the third quarter, though it was not driven by hard goods or consumer spending. According to the Commerce Department, this second straight quarter of solid growth was on the strength of exports, business investment, and military spending. While the GDP appeared strong, it did not contribute to the tension in capacity.
When it comes to overall fleet costs, things are moving. The incoming third quarter financial reports show continued increases in purchased transportation, as fleets are increasingly reliant on brokered capacity to handle the irregular route loads. Such discrimination between regular and irregular route freight is an explicit response to the tight capacity environment.
A total of 355 truck fleet companies with 9,090 trucks went bankrupt in the third quarter of 2014. This is down from the second quarter of 2014, but well above the 4,985 trucks in the third quarter of 2013.
In October, Schneider National joined a growing group of large fleets by announcing a 13% increase in driver compensation. This increase is in-line with that of other fleet announcements.
The Federal Motor Carrier Safety Administration’s proposal to increase the minimum amount of liability insurance (currently a $750,000 minimum) has been sent to the White House’s Office of Management and Budget (OMB). The Department of Transportation projects the rule to clear the OMB, and it will have a 60-day comment period ending, December 12.
According to the Department of Energy Information Administration, the average price for diesel per gallon is $3.62. Weekly diesel prices have not seen a single increase for 19 straight weeks—since the week of June 23, 2014.
Which transportation indicators or topics are most relevant to your interests? Leave your suggestions in the comment section.