Freight Rate Average Hits All-Time High in November 2021
Supply shortages, coronavirus, and the holiday season combine to bring us the highest freight rates per mile ever recorded by the DAT.
Details
- Dry van shipping increased seven cents, to $2.93.
- Flatbed logistics actually decreased a bit, going from $3.07 to $3.03.
- Reefer hauling skyrocketed, rising 17 cents to $3.44.
- The average increased six cents to $3.13.
Some of this increase can be tied to general inflation, however, it is a 24% increase over what was in the trucking industry in November 2020, a time when pent-up demand and exacerbated supply due to vaccine shipping caused average rates to increase to pretty high numbers, at the time. This overshadows the average 6% or so inflation general goods have experienced in the same period.
What might be the cause for this increase that we have not mentioned yet is truckers finally getting the respect they deserve. Working during lockdowns to be hailed as “heroes” only to be taken out of the limelight when people are tired of lockdowns. With everyone else staying home, the economy grinded to a halt, and demand for goods exceeded supply, leading to the issues that we have now. With port backlogs and other events going on in the world today, companies and customers are willing to pay a premium to have their goods shipped.
Trucking businesses are not the only ones benefiting; those companies are also offering more per mile in order to attract top talent. Company drivers paid 55 cents per mile now may be convinced to change companies for 60 cents per mile, plus sign-on bonuses, which appears to be the norm for the time being.
Will the trucking industry remain at this higher level of profit margin for the foreseeable future? Almost certainly. Will the change be permanent? Only time will tell as more and more people want things moved from Point A to Point B.
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