U.S. Trucking Prices Are About to Rise Even More
Date: Monday, April 2, 2018
Source: Bloomberg News
A U.S. trucking shortage that has pushed up freight costs for everything from cereal to toothbrushes is about to get worse.
On Sunday, police nationwide began enforcing rules requiring most big rigs to use electronic logging devices to record driver hours. While truckers have long been barred from driving more than 11 hours a day, the new ELDs prevent them from fudging their times on paper logs. That means more trucks are likely to be parked when drivers hit their limits.
“You’re going to be at least tightening the screws a little bit on an already tight market place,” said Jason Seidl, an analyst at Cowen & Co. “If you’re a shipper, it’s not something that’s going to be perceived as friendly.”
The ELD rules add another choke point for freight prices, which are already pinching earnings at companies from Cheerios maker General Mills Inc. to retailer Ross Stores Inc. A driver shortage, surging demand and rough weather already have pushed spot rates up 28 percent this year through March 23 compared with a year earlier, according to data compiled by Bloomberg.
Even longer-term contract rates, which are more stable than short-term spot prices, are expected to rise 12 percent this year, according to consulting group FTR Transportation Intelligence. That would be the highest increase in more than a decade. Contract prices rose just 3.9 percent last year.
The ELD rules divided big trucking companies and independent owner-operators. Most large trucking companies adopted ELDs years ago to ensure that they complied with limits on hours and to eliminate the hassle of driver paperwork.
But smaller and independent drivers resisted the change. The American Trucking Associations supported the regulations, saying they made highways safer, while the Owner-Operator Independent Drivers Association railed against the requirement as another regulatory burden.
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