It’s the best of times for truckload (TL) and less-than-truckload (LTL) carriers, according to Logistics Management magazine. Detailing the 29th Annual State of Logistics Report produced by A. T. Kearney in partnership with the Council of Supply Chain Management Professionals (CSCMP) and Penske Logistics, it pronounced, “There haven’t been truckload rates this high since before the Great Recession.”
The “once-beleaguered” LTL market is “enjoying its best pricing and rate environment in at least a decade with no sign that this is a temporary situation.”
Those are strong statements backed by facts and figures from the American Trucking Association (ATA) Truck Tonnage Index:
- In Q1 2018, TL revenue per loaded mile (excluding fuel surcharges) shot up 9.9% compared to Q1 2017. During the same period, loaded miles dropped by 2.2%, indicating tight capacity and rising freight demand.
- LTL revenue per hundredweight jumped 3.7% in Q1 2018 compared to Q1 2017.
- In April, the ATA’s seasonally adjusted truck tonnage index was 9.5% higher than April 2017 levels. In the same period, LTL tonnage grew by 4.7%, indicating that some heavier shipments are shifting to LTL from TL carriers.
For many shippers, however, these are not the best of times. High transportation prices are taking a bite out of the margins of large national shippers, who are forced to maintain service levels while absorbing the extra costs.
The best way for shippers to manage costs in a tight market is to improve efficiency throughout their supply chains. As Logistics Management noted, “old-fashioned ingenuity, building relationships with carriers and an increasing knowledge base of best practices may help logisticians ride out the challenges longer term.”
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