In our last article, we talked about the change in total revenue and weight hauled over time in the trucking industry. To compile that data took deep-diving into the American Trucking Associations’ article posts, years into the past. Today, we at TopMark Funding are saving even more time than before, going deep into DAT Solutions’ (formerly known as Dial-a-Truck) to find monthly data of trucking rates over time for dry van, flatbed, and reefer shipments.
Methodology for Trucking Rates Over Time
DAT has numerous blog posts for the Rate Trend of the Week, with specific numbers stretching all the way back to mid-2015. They often have the monthly averages included in the articles, and, if not, it’s a simple matter of averaging the weekly data.
The data gets spottier and spottier as time goes further back. Often the article writer(s) would say the relative rate change (2 cents higher than last month) but not the absolute rate change (how much was last month where this month is 2 cents higher?) Any data that was not stated (Reefer average for February 2018, for example) were predicted using linear averaging. Here are the monthly averages for the three most common forms of loads.
From August 2015 to January 2020, the rate of Dry Van shipments has ranged from $1.57 (March 2016) to $2.31 (June 2018) per mile.
From August 2015 to January 2020, the rate of Flatbed shipments has ranged from $1.83 (March 2016) to $2.81 (June 2018) per mile.
From August 2015 to January 2020, the rate of Reefer shipments has ranged from $1.80 (March 2016) to $2.61 (June 2018) per mile.
For all three types of hauling, the rate per mile is slowly increasing. Since inflation averages at around 2%, this is not surprising.
Quite surprisingly, all three forms of shipment peaked and bottomed out in the exact same months, March 2016 and June 2018, respectively.
Discovered in the previous article, the proportion of the total United States freight bill that belonged to trucking is declining. The portion of the graph that matches our findings here (mid-2015 to January 2020) has a very strong correlation with the rates we found. The demand for truck hauling is very elastic: as the price goes up, the percentage share of freight revenue goes down. This should make sense to anyone who thinks about it long enough: if trucks ran at five cents per mile, shippers would never use rail for land travel.
Trucking rates over time peaked at around late-2017 and early-2018. Since then, they have declined but appear to have the potential to go back up. With all three forms of hauling being below the average trendline, it is likely (though not assured) that rates will go up for the foreseeable future, meaning larger revenues for truckers. This makes sense because the change of the total amount of weight hauled over the years has increased at a slower rate than the total revenue that the trucking industry has pulled in year by year.
If you have ever considered getting into trucking or expanding your fleet, now is a very good time to do it. If you ever need financing for that new truck or trailer, you know who to get into contact with: TopMark Funding!
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