Last year, we examined some important trends in the trucking industry and their potential impact on businesses both in Arkansas and across the United States. Our predictions held true; these changes may continue to shape the industry through 2017.
New Trucking Policies May Bring Twists and Turns
Our predictions for trucking industry trends in 2016 have held true, and many of these factors may impact the performance of your trucking company both in 2017 and beyond. By understanding these key changes, you can help your business adapt and stay ahead of the competition.
Recent governmental changes mean that even the most experienced trucking company should be prepared for major policy changes. Expect canceled regulations, infrastructure changes, and tax reform. New taxes, restrictions, and mandates may affect budgets and operations. Our advice is to keep monitoring trucking industry trends to hedge against risk, and to be wary when entering into long-term shipping contracts. It may be wise to find ways to cut costs in order to minimize potential losses from new laws and regulations.
Carriers and Suppliers Must Coordinate New Schedules and Procedures
The new e-logging mandate requires every trucking company in Arkansas and across the U.S. to comply by the end of 2017. The mandate requires carriers to provide shippers with accurate driving logs and to ensure that their drivers meet new rest requirements. Shippers must understand that delivery times may slow down as a result, because drivers will be legally obligated to take more breaks and spend less time continuously behind the wheel. With proper communication and transparency between you and your carrier, you can help your supply chain smoothly transition to the new landscape and reliably strengthen your business relationships.
Freight Rates Will Likely Continue to Rise
The latter half of 2016 saw an increase in freight rates, with Arkansas and other Southern and Midwestern states taking the brunt of the surge. A high demand for retail goods and refrigerated storage coupled with an influx of reliable truck drivers drove up costs and were a leading cause of delays in expected delivery times. In addition, slowed hiring in the trucking sector resulted in increased pay for current drivers, and consequently increased freight rates. Potential infrastructure changes may help bolster hiring and result in healthier operations for 2017 and beyond.
New Dimensioning Technology Will Affect Freight Rates
More trucking companies are veering away from the traditional National Motor Freight Classification system, toward advanced dimensioning machines to compute optimal freight rates. This breakthrough technology lets carriers optimize space for shipments, which results in lower costs for shippers regardless of seasonality or demand.
Expect Heavy Competition in Refrigerated Goods
Despite the continuing upswing in refrigerated goods transport and steadily low fuel prices, freight rates continue to rise in this specialized sector. Limited storage capacity and changes from the new e-logging mandate translate to premium prices for refrigerated truckload space. Both carriers and shippers must coordinate their efforts to succeed in this market, for their part, shippers should expect fierce competition, particularly during the summer and in perennially warm locations.
Carrier–Shipper Relationships Are More Vital Than Ever
With a fast-approaching deadline for e-logging compliance and possible industry changes in the form of new trucking laws, it remains crucial for carriers and shippers to work as a team. Your trucking company should set clear goals and be willing to compromise for the greater good of both parties. We strongly advise keeping communications channels open and notifying partners of changes as soon as they come to light. Develop backup plans to minimize costs and delays.
RCX Solutions is based in Little Rock, Arkansas. We provide freight transportation and logistics services that meet the needs of an evolving industry. For more information about advanced trucking services or news on trucking industry trends, please contact RCX Solutions today at (866) 336-9697.