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ELD implementation to push truckload rates higher in 2017—and beyond

According to an article by Keven Jones from Fleet Owner on Jan 13, 2017, Carriers can expect a 4% increase this year.  Here is part of his article:

Truckload rates will increase about 4% this year, with capacity pressure brought on by the looming ELD (Electronic Logging Device) mandate more than compensating for an economic recovery that’s become “stale,” contends transportation economist Noël Perry.

An array of federal regulations—most significantly, the electronic logging device mandate that takes effect in December—will result in substantial productivity losses in the near term. That, in turn, will increase the demand for truck drivers—except that those drivers are not to be found.

Perry notes that the “productivity hit” for large fleets, which had some drivers “cutting corners” prior the adoption of electronic logs, initially ran 4-8%. And while carriers have reengineered lanes, those changes have not been able to fully recover that lost productivity. The impact of ELDs on late adopters is likely to much higher.

“The maximum impact will occur in 2018, and it won’t stop until two to three years afterwards when people finally figure out they have to do it,” Perry said.

FTR charts truckload capacity utilization spiking at more than 100% into next year, assuming the ELD requirement “is enforced with any kind of efficiency.” The “worst case” result will be “a major truck shortage” lasting 4-6 months. But even this year, Perry puts the chance of a “significant” capacity shortage at 60%, with a 30% chance of a “real whacko” shortage.

Perry also notes that the spot market tends to be much more volatile, with the 4% increase in contract rates translating “easily” to a 15-20% upswing in spot pricing.


We are also hearing from recruiters visiting our school that driver pay will continue to rise along with an increase in sign on bonuses.  There has never been a better time to get into the trucking industry.