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The North American trucking industry has dealt with significant disruptions over the years. The recent protests and border blockades happening throughout Canada are just a couple of examples of the larger challenges facing this valuable sector of the supply chain.
At the forefront of the issues currently being felt is the unprecedented rise of trucking rates during the past 2 months. Rates have catapulted to historically high levels due to a multitude of concerns beyond the aforementioned demonstrations. Among them are the current record-breaking fuel costs, the ongoing driver shortage crisis, a lack of equipment due to delays in manufacturing of tractors and trailers as well as a robust economy with an overwhelming demand for transportation equipment that shows no signs of letting up.
“Combining the current truck shortage with the huge surge in shipments only compounds the capacity constraints. Truck-to-load ratios are even lower than the record low capacity crunch that temporarily ensued following the Electronic Logging Device (ELD) mandate in the US close to 5 years ago,” says Claudia Milicevic, President of Loadlink Technologies. Additionally, year-over-year, January’s truck-to-load ratio was 0.93, 64 percent lower compared to the ratio of 2.57 in January 2021.
Furthermore, according to Truckstop.com, trucking rates for cross border shipments between Canada and the U.S. rose a shocking 44% from January 2nd until February 5th, 2022. The expectation is that this already staggering amount will maintain or continue to rise throughout the remainder of 2022 and, possibly, up until early 2023.
During this tumultuous period, freight decision makers have been forced to secure equipment abruptly, at increased costs and with adequate service levels at best, in an effort to keep their cargo moving. While it is hopeful that as the weather warms up, we will see a bit of relief when it comes to rates and an increase in equipment supply to lessen the current imbalance in the market, we can be assured that the hurdles within the trucking industry will persist for a lengthy period of time due to the unprecedented number of issues at hand.
For more information, contact William Sanchez, Manager – Truck Services.
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