Freight rates continue upward trend in 2014 - The Packer

Freight rates continue upward trend in 2014

03/21/2014 11:08:00 AM
Tom Burfield

“(CARB) has required substantial investments for those trucking companies operating in California, which has increased costs and/or lowered the supply of trucks there,” he said.

Rising costs of health care and other costs of doing business also will bump up freight rates, Stoiber said, especially for produce shipments.

“A carrier who has a refrigerated trailer and wants to haul produce knows he is going to maximize his rate per mile,” he said. “But he’s taking on additional risk because of it.”

The frequency of claims for temperature abuse or problems like shifting loads are higher in produce than in more stable categories, he added.

Freight rates could increase about 6% on dry goods compared to last year, Lund said. And they could go up 6% to 10% on refrigerated products.

A driver shortage is becoming more likely as the economy picks up, Moore said.

“The softer economy over the last few years has kept it from being dire,” he said.

Stoiber believes the industry is “facing a bottleneck when it comes to getting people into the industry.”

Aging baby boomers are retiring, but federal law requires interstate drivers to be at least 18, he said. That means that high school graduates have to wait two or three years to obtain a commercial driver’s license. By then, many already have embarked on other careers.

Lund expects a driver shortage to continue in spite of high unemployment because people simply don’t want to drive a truck for a living.

Increasingly strict regulations and poor treatment of drivers are dissuading workers from seeking jobs in the trucking industry, he said.

A new rating system from Federal Motor Carriers Safety Association also will take a toll, Stoiber said.

“Trucking companies are being much more cautious about who they select, based on their background, driving record and any issues they may have had in the past,” he said.

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