Shippers in a tight spot on rate negotiations: Rising rates and climbing fuel prices prompted FTR’s Shippers Conditions Index to plunge in August, FTR reported last week. With spot market rates soaring in recent months, pressure is mounting in the contract market, FTR notes, with carriers expected to force rate increases on shippers through this year and into 2018.
“Shippers are in a tough position right now,” says FTR’s Jonathan Starks, chief operating officer. “We have known for some time that the trucking industry has been operating with very little excess capacity. However, the weak pricing environment masked that phenomenon for the last year. Hurricanes Harvey and Irma exposed shippers to this new reality. There just wasn’t enough excess capacity to deal with spikes, and the result was a significant spot market pricing gain that persisted through early October.”
“When you couple the Hurricane impacts with increased freight demand and the fast approaching ELD implementation, there’s a real fear that loads won’t get delivered. This is already beginning to show up in the contract markets. Spot prices were the canary in the coal mine. Contract pricing is likely to show significant gains through most of 2018.”
Trucking employment nearly unchanged in October: Total employment in the for-hire trucking industry fell by 100 jobs in October, according to the Department of Labor’s monthly Employment Situation Report.
Employment figures in the trucking industry have been flat most of the year, following strong first quarter gains.
The DOL did upwardly revise its initial September for-hire trucking employment total by 2,400 jobs from the preliminary 100-job gain reported last month.
The U.S. economy as a whole added 261,000 jobs in October, pushing the unemployment rate down to 4.1 percent.
For-hire trucking industry employment totaled 1.4735 million in October. That stat does not account for private fleet employment data and is based on payroll employee numbers. October’s total was up 13,500 jobs from the same month last year.
The construction industry in October added 11,000 jobs. Manufacturing added 24,000 jobs. The transportation and warehousing sector, the umbrella group for the trucking industry, gained 8,400 jobs.