Freight Rates Continued to Break Records in January 2022
The coronavirus pandemic keeps on giving. What once was a source of anguish for truckers with massive layoffs across the industry is now causing demand for logistical services to exceed supply, and the rate per mile for all three forms of primary freight have risen yet again, exceeding last month’s new record. DAT Freight & Analytics has the numbers.
The Numbers
- Dry van was $3.10 per mile, an increase of eleven cents.
- Flatbed had the smallest increase at six cents, totalling $3.13.
- Reefer rose twelve cents to an average of $3.59 per mile.
- The average was $3.27, increasing by nine cents.
One of the major factors for these record-high rates is inflation. However, while the Consumer Price Index has increased by 7.5% in the past twelve months, freight rates have increased by approximately 33%. In contrast, diesel rose a “mere” 23%. No matter how you cut it, fleets are making more spending power per mile.
The biggest factor in the increased rates is the increased purchasing price for trucks. With companies paying top dollar to be able to get new (or even used) big rigs, they pass that cost onto the company needing their goods shipped to be able to make a profit. With demand as high as it is now, they can also charge more than that which would cover the expense, generating profit. There is no denying that those who bought trucks during the worst of the pandemic have made off like bandits when now shipping companies cannot get enough of them.
The ultimate question to ask is when these rates are going to stabilize. We wrote in the start of 2021 saying that the freight rates could not possibly reach $5 per mile, but these recent numbers of consistent growth each month are having us now doubt that statement. We live in extraordinary times, so it is possible we could see freight rates continue to rise for the foreseeable future.
We place our chips on the market rates reaching equilibrium when the global supply chain shortages for all things used to manufacture trucks come to an end. Considering how many different things are needed to make a truck, it may be a while before that day comes. Enjoy this time of prosperity while it lasts!
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