Truck capacity is expected to be tapped out by early spring 2018, according to data tracked by research firm FTR Transportation Intelligence, and it could tighten sooner if freight demand grows faster than expected or a major winter storm develops.
“The hurricanes highlighted the lack of extra [truck] capacity available in the system,” noted Eric Starks, FTR’s chairman and CEO, in a statement, which was followed by what he called “continued strong freight conditions” in the third and fourth quarters this year.
“Shippers are really feeling the pinch right now and there is fear that the ELD [electronic logging device] mandate will impact capacity in the spring,” Starks stressed. “We have essentially hit the 100% capacity mark; there is little, if any excess truck capacity.”
He said trucking freight rates, in both the spot and contract segments, have been increasing for shippers, which is an “immediate reflection” of the tight truck capacity situation.
Data tracked by DAT Solutions, for example, showed that the number of available loads for the week ending December 16 increased 2.4% while available capacity dipped 7.5%, sending load-to-truck ratios higher in the dry van, refrigerated and flatbed sectors compared to the previous week.
Dry van freight posts on DAT’s load board network slipped 1% while truck posts fell 7% and that tightened capacity, causing the dry van load-to-truck ratio to increase 9% to 7.8 loads per truck. Meanwhile, in the refrigerated segment, load posts increased 3% and truck posts decreased 7%, propelling the load-to-truck ratio to rise 12% to 11 loads per truck.
FTR’s Starks added that, after the “holiday blitz,” tight capacity should ease somewhat in the first quarter of 2018, as it typically does, before peaking again in the spring.
“But add in [the ELD] regulations, continued freight growth, or winter storms and we could be pushing that above 100%,” he emphasized. “That would leave shippers scrambling to get loads delivered. And that means paying premium rates for those deliveries. It may be a tough first half of 2018 for shippers.”