“From the perspective of carriers, things are quite good,” Avery Vise, vice-president – of FTR, said.
Truck loadings in the dry van, reefer, and flatbed segments are expected to finish this year up 6%, with another 3.3% gain next year. Truckload rates in the U.S. are expected to end the year up 18% compared to last year, while flattening at high levels next year.
The spot market accounts for about 30% of all freight and is a leading indicator for rates. Spot market rates could slide about 6% next year, but will remain above the peak of the robust 2018 market, Vise said. Contract rates, which are less volatile, will peak early next year up about 13% from 2020, FTR projects, and will close out 2022 about 4% higher than this year.
LTL rates are forecast to be up 15% this year, and slightly negative in 2022. Blending spot market and contract rates produces an 18% increase this year, with a flat 2022.
The rate increases are being driven by capacity utilization of 100%, meaning virtually every seated truck is engaged in hauling freight. The 10-year average for capacity utilization is 91%.
And then there’s the difficulty the industry is having in finding qualified drivers. Vise said DOT numbers suggest the number of new CDLs issued in the U.S. last year was down about 30%, thanks to Covid-related closures of training schools and licensing agencies.
Drivers are also leaving for other industries, such as residential construction or local delivery jobs. Trucking-related payroll jobs are down 33,000 from pre-pandemic levels.