ROUND UP THE USUAL SUSPECTS
Whether it’s the Wall Street Journal or various trade publications, logistics professionals are talking about the fact that freight rates are going up. Trucks are harder to find. Expenses are running over their anticipated budgeted amounts. But in our minds eye this should not have caught anyone by surprise. The confluence of events that has brought us to our position is being driven by the Usual Suspects.
Fuel costs are on the rise, after being artificially suppressed. The already tight market for drivers is pressing up wages as drivers are ‘graying out’ of the employment marketplace and others are drawn to jobs that are more readily available based on the sustained decrease in unemployment, not only in the US but on a global basis. This is not something that took place overnight. As you can see the decline in unemployment has been on a steady course for years.
Then we take into consideration the improvement in our economy which has remained positive since Q1 14. These numbers continue to be bolstered by interest rates remaining relatively low. Further economic growth is coming from deregulation and the repatriation of funds from offshore. In addition to the above we can throw in the ELD regulation impact which has been kicking around for years - there should not be any surprises here.
So why are so many shippers surprised? It is the fact that they did not want to believe that rates could go up. Based on the information above we now know this was wishful thinking. Unfortunately many shippers do not know where their rates stand relative to the marketplace which is evolving. That is where Data2Logistics comes in. Our experienced Professional Service Team understands the marketplace and marketplace drivers.