LTL Continues To Grow In 2018

Less-than-truckload (LTL) shipping is very popular among small businesses and has continually grown in the past few years. In 2018, the LTL sector is expected to have substantial growth in profit and number of shipments across the U.S. This growth in LTL is a result of the tightening of trucking capacity and growth in e-commerce and rates.

Tightening of Trucking Capacity

Right now, the freight market for truckers is the best it has been in the last decade. Wayne Spain, president, and COO of Averitt Express said that the recent mandate for ELD’s and the overall economy are key factors in the growing market. The ELD mandate was created to increase commercial motor vehicle safety, reduce paperwork, and improve Hours of Service (HOS) compliance. The ELD mandate also makes it more difficult for drivers to misrepresent their driving time, consequently reducing HOS violations. On April 1, FMCSA will begin full enforcement of the ELD compliance. In two weeks, those without an ELD will be placed out of service and violations will be placed on the driver.

“While the ELD mandate may lead to more tightening of capacity after the April 1 deadline, another factor to look for is the effect of the new tax law,” Spain said.

E-Commerce Increases

Within the past few years, technology has drastically changed the shipping industry and has created an increase in the number of home deliveries. The increase in e-commerce has created more trucks and drivers for this business due to higher rates for home deliveries. The surge in online orders and home deliveries are making major companies like Walmart and Amazon to need carriers to complete customer shipping needs all over the country. Mike Shevell, chairman of the Shevell Group, said that chasing the last-mile market is good business but can be costly. Working with companies like Walmart and Amazon is all part of the LTL process.

Rising Rates

LTL shippers should expect a rate increase of 5% or more this year. These rates are increasing to compensate for driver wages and the technological equipment needed to meet customer expectations. Shippers are aware of these increases and are still fighting to keep rates from increasing too much. If more companies exit the business, this means that there will be fewer choices and most likely higher rates.

Overall, 2018 is looking positive for the LTL shipping industry. It will be interesting to see what new regulations or technology will come up throughout the year to make an impact.

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