Companies hoping for a break from high shipping prices may have to hold off for yet another month, as freight rates for all three forms of freight were equal to or higher on a per mile basis than the month before.
October 2021 Numbers
- Dry van increased three cents per mile, to a total of $2.86 per mile.
- Flatbed logistics remained at $3.07 per mile.
- Reefer hauling gained four cents per mile to $3.27.
- The average rose approximately three cents to $3.07 per mile.
What is the cause of the increased freight rates throughout the nation? It is the result of a perfect storm of supply and demand, plus with the pull of inflation.
Anyone with a basic understanding of economics understands that inflation places a nominal increase in pay rates without actually increasing real wages, but the American Trucking Association reports that trucker pay has increased five times faster than average this year. Assuming inflation is 2.5 times above average, this means drivers are still coming out ahead.
Beyond truckers getting paid more being factored into the rate, the demand for goods to be shipped around the country is constantly increasing with no method for the goods to go anywhere. The twin ports of Long Beach and Los Angeles are starting to fine ships for not sending out their cargo, meaning ocean carriers are likely to be willing to pay a premium to ship their goods, which will no doubt raise the average higher in November than it otherwise would have.
Between potential vaccine mandates, port backlogs, inflation, trucks rolling off of lots, and many more events currently going on, the trucking industry certainly has its hands full in keeping the nation running. Hopefully one or two of the balls currently being juggled in the air can be put down soon, or this is going to be one chaotic Christmas!
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