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FTR Predicts Strong Trucking Outlook for 2018

The trucking market in the U.S. is at nearly full active truck capacity, with truck orders continuing to rise, reports FTR Transportation Intelligence. While there is some expectation the market could soften a bit this year, 2018 still projects to be strong overall, said onathan Starks, COO of FTR’s in the firm’s State of Freight: Trucking Outlook for 2018.

As reported in Commercial Carrier Journal:

A strong market brings with it some cost pressures and constraints, particularly around pay raises and major bonuses used to recruit and retain drivers. According to Avery Vise, vice president of trucking research at FTR, the market is tight – very close to full active truck capacity – and 2018 looks to be a strong year for truck orders. However, there aren’t enough drivers to operate those trucks.

“With this backdrop, we see the overall trucking conditions improving in 2018,” Vise said. “A strong market brings with it some cost pressures in the form of higher driver wages, there are some equipment acquisition costs, and quite often, because the trucking conditions follow general demand, we often see higher fuel costs as well. But between the rates increases and the new tax relief, we believe that those will more than offset the rising costs in the near term at least.”

When it comes to the impact on the ELD mandate on the market, Vise explained effects will show up in reduced miles for carriers that have not strictly complied with the hours of service rules in the past. In addition, another effect of the mandate could be an exodus of drivers in the market. But Vise pointed out that it may take a while before the industry knows exactly what the extent of such an exodus would be.

“Anecdotally, we have heard of some owner operators and smaller carriers calling it quits with the implementation [of ELDs],” Vise explained. “Presumably, most of those who would consider doing so would hold out at least until April because that’s when the enforcement is going to become strict and will become an out-of-service violation.”

Vise also stressed that carriers who adopted electronic logs early are now in a position to reap the rewards from their investment. For instance, since about 2011, there has been a drop in errors and CSA violations that are often made on paper logs for those carriers who already adopted ELDs. And not having current log book or record of duty status violations have also fallen sharply over the last few years because of ELDs, Vise explained.

Meanwhile, he said, violations related to e-log use have skyrocketed from 2011 to 2017.

“The point of that is to reinforce what we already know, which is a major segment of the market has already adopted electronic logs,” Vise said. “There are definitely going to be some benefits. I think the most immediate benefit is that unlike carriers that haven’t had electronic logs and haven’t been obeying strictly to all of the limits, they won’t have the same kind of disruptions. They’ve already adjusted their lanes to accommodate the limits, for example, on driving time. That’s one immediate, competitive benefit.”

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