Truckload rates are spiking 10 percent and higher as rising freight demand collides with deep cuts in capacity, according to freight brokers.
Freight brokers report that shortages in truckload equipment availability in certain markets and lanes are driving up truck rates in some areas faster than expected.
“Some of the increases have been pretty sharp,” said Doug Waggoner, president and CEO of Echo Global Logistics, a broker and logistics company in Chicago.
Truckload rates in some lanes are up as much as 20 percent, he said, as demand in April and May shot higher than available trailer space.
“In certain markets I’d put it as high as 30 percent,” said Gail Rutkowski, president of Wabash Worldwide Logistics in Chicago. “In some markets you can’t even buy a truck.”
The strength of the truckload freight recovery is evident at CRST International, which is accelerating growth plans to catch up with revenue rising faster than its projections.
“We’re hitting equipment utilization numbers that haven’t been seen in years,” said Dave Rusch, president and CEO of the Cedar Rapids, Iowa-based transportation company.
The carrier said last month it will spend $100 million in the next 18 months to add 700 tractors and 1,500 trailers at three of its operating subsidiaries.
But many smaller truckload carriers may be slow to add capacity, partly out of concern for the strength of the recovery and because of a lack of available financing.
Carriers are also eager to enjoy pricing power they haven’t had in years, Waggoner said. “As far as I can tell, they don’t intend to add capacity anytime soon.”
--Contact William B. Cassidy at firstname.lastname@example.org.