Small-Business Truckers Profit from Freight Rate Boost in January
Predictions point to a lucrative year for small owner-operators.
2018 is shaping up to be a very profitable year for small-business truckers according to industry experts. During what is normally a slow period for truckers, January offered a boost in freight rates resulting in some major earnings for owner-operators. Thanks largely to the shortage of drivers nationwide, shippers and brokers are struggling to transport goods, increasing demand, and opportunities for smaller owner-operators.
This is a drastically different picture from a few years ago when there was more drivers than freight, lowering freight rates.
David Ross, an analyst for Stifel Financial Corp, anticipates 2018 to be the most profitable year for trucking since 2005. “There are real serious constraints on capacity – mainly a lack of sufficient amounts of qualified drivers – that should drive trucking rates much higher as we move through the year.”
Mark Montague, an analyst for DAT Solutions which monitors freight rates, says that the electronic logging device mandate combined with the recent economic growth and significant winter weather throughout the country has had a hand in driving up the demand for drivers and freight rates, especially when compared with last year. DAT network closed out 2017 with 179 million load and truck postings, a 79 percent increase from the 100 million postings in 2016.
The ELD Mandate, which requires truckers to drive with an installed device that electronically records their hours behind the wheel, has impacted driver productivity, reinforcing the need for more drivers. While paper records allowed for falsification so truckers could drive longer than what is permitted by law, drivers who exceed their hours-of-service allowance (11 hours during a 14 hour work day) under the ELD mandate face stiff penalties, including being declared out of service.
The limitations ELD’s place on current drivers for better safety coupled with less people pursuing careers in trucking suggests that the shortage, and therefore demand, will continue for the foreseeable future. Small-business truckers should continue to expect and profit from higher freight rates throughout 2018.