Executive Briefings

2010 in Review: Rates Increase as Freight Rebounds

For the trucking industry, 2010 was a "good news, bad news" kind of year. On the plus side, leading economic indicators inched up, and transportation was no exception. Truck freight tonnage increased by 6 percent, compared to 2009, while spot market load volume more than doubled.

Truckload rates rose alongside the heightened demand. Van hauls saw a 9-percent boost in rates paid by freight brokers to the carriers, compared to 2009. Shipper-to-carrier contract rates rose by a more modest 0.9 percent, not including surcharges. In many markets, brokers paid carriers more than the shipper's contract rate for the same lane, especially for hard-to-find equipment like reefers and flatbeds.

Carriers' costs rose, and some of the increase was passed along to brokers and shippers. Diesel fuel prices headed up, exceeding $3.25 by mid-December. The average fuel surcharge for vans went from $0.22 to $0.31 per mile, for a 40-percent increase compared to 2009.

In 2011, drivers' Hours of Service (HOS) rules are expected to change, leading to a 6-percent decline in productive hours per truck. This is likely to contribute to capacity constraints in the coming year.

Looking ahead to 2011, the business forecast indicates continued recovery, accompanied by additional tightening of truck capacity and upward pressure on freight rates.

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For the trucking industry, 2010 was a "good news, bad news" kind of year. On the plus side, leading economic indicators inched up, and transportation was no exception. Truck freight tonnage increased by 6 percent, compared to 2009, while spot market load volume more than doubled.

Truckload rates rose alongside the heightened demand. Van hauls saw a 9-percent boost in rates paid by freight brokers to the carriers, compared to 2009. Shipper-to-carrier contract rates rose by a more modest 0.9 percent, not including surcharges. In many markets, brokers paid carriers more than the shipper's contract rate for the same lane, especially for hard-to-find equipment like reefers and flatbeds.

Carriers' costs rose, and some of the increase was passed along to brokers and shippers. Diesel fuel prices headed up, exceeding $3.25 by mid-December. The average fuel surcharge for vans went from $0.22 to $0.31 per mile, for a 40-percent increase compared to 2009.

In 2011, drivers' Hours of Service (HOS) rules are expected to change, leading to a 6-percent decline in productive hours per truck. This is likely to contribute to capacity constraints in the coming year.

Looking ahead to 2011, the business forecast indicates continued recovery, accompanied by additional tightening of truck capacity and upward pressure on freight rates.

Read Full Article