Before setting course in 2018, it behooves supply chain professionals to take a high-level glance back at the road traveled in 2017 and understand how we got to where we are today.
2017 At a Glance
- Freight volumes increased upwards of 4.7% over 2016
- Class 8 tractor sales were 50% better in July and August 2017 over that same period in 2016
- Truck capacity expansion fell behind demand due to unforeseen conditions that resulted from 2 catastrophic hurricanes
- Driver shortage continued to plague the industry
- Looming ELD deadline expected to take capacity out of the market
- Strong U.S. economic growth
Increased demand and decreased supply of trucks caused rates to increase and began the shift to a carrier market. These patterns disrupted shippers and carriers causing a spike in rates, travel delays, and anxiety about the looming ELD mandate implications. “Uncertainty” was and still is the name of the game as the entire industry braces for a likely turbulent 2018.
“What to look forward to in 2018? Tight capacity to start the year, full ELD implementation April 1st, continued manufacturing strength.” Mike Fritz, Sunset Transportation Carrier Relations Manager
What can you expect from 2018?
- ELD mandate full implementation
- Strong US Economy
- Freight volumes expected to increase 3.4% in 2018
- Rising freight costs — JP Morgan forecasts industry-wide realized rates excluding fuel at +5.5% in 2018 and an additional +3.5% in 2019
- Diesel fuel prices expected to increase 4-8% through 2018
- Extremely tight labor market with rising unseated tractor counts
- Instead of facing the potential setbacks from implementing the ELD mandate analysts expect a staggering number of retiring truckers in 2018 (majority owner-operators)
What does this mean for shippers?
All signs point to a capacity crunch for the record books in 2018. It’s already been a memorable few weeks, as wildfires, mudslides, and sub-zero temperatures wreaked havoc on transit times in many parts of the country. Natural disasters notwithstanding, policy changes from D.C., autonomous vehicles, the power of digital and e-commerce consumer demand, and technological advancements in supply chains are what we’re focused on in 2018. Buckle up, friends…it’s going to get bumpy.
“Flexibility is becoming limited to get products expedited to the end consumer, forcing a change in prior lean logistics methods that promoted decreased warehouse size and savings on upstream supply chain costs.” – Tracy Meetre, Vice President Sales and Marketing, Sunset Transportation
With so many unknowns in 2018, now is the time to develop a trustworthy partnership with a 3PL that can scale and adapt to your needs. If you’re feeling unprepared for what’s ahead, Sunset can help you get on track, on time, and on budget.
To ensure your logistics program is prepared to weather 2018’s turbulence, contact your account manager directly, or talk to our implementation experts by emailing Implementation@SunsetTrans.com.
28th Annual State Of Logistics Report. The Council of Supply Chain Management Professionals (CSCMP)
Smith, Jennifer. 2018, January 5. Tight Trucking Market Has Retailers, Manufacturers Paying Steep Prices. The Wall Street Journal.
Dickinson, Tim. 2018, January 2. Death of the American Trucker. Rolling Stone.