Freight Rates Are Rising, But They Still Have a Long Way to Go

[Mike]

Rates are up, and they continue to go up. Fuel is up too, but that is a separate issue for a different reason.

I do not want to jump the gun here, but I also do not want the people who follow us to miss the boat. I believe we are on a sustained climb in freight rates, and I think it may last for a while.

The rates I am seeing right now are nice. By nice, I mean they are better than we have seen in quite some time.

That said, they still are not where they need to be. That is the part carriers need to understand.

Expenses are not what they used to be. A well-equipped truck now costs $200,000 and up. Tires are at all-time highs. Parts and labor are through the roof. Insurance is high. Repairs are high. Just about every cost tied to running a truck is higher than it used to be.

Bottom line, the cost of buying a truck, maintaining a truck, and paying a driver to drive that truck is nothing like it was before 2020. It takes a lot more money to run a truck and still turn a profit today than it did just a few short years ago, and everyone needs to realize that.

So yes, rates are getting better, and that is a good thing. But better does not mean good enough. Not yet.

We are moving in the right direction. There is no question about that. I just think people need to keep in mind that rates still have a long way to go before they truly match the cost of doing business in today’s market.

 

[freedhardwoods]

Most of the freight we haul comes from the spot market. Three months ago the truck I drive was making about $6500/week. Now it is around $7500/ week and slowly rising. I have been pulling a 53' conestoga for over 3 years. I just found out that in 2 or 3 weeks I will be hauling some oversize loads from IN to OK on a tri-axle rgn for a few weeks. That will bring the pay up some more.

 

[Mike]

Most of the freight we haul comes from the spot market. Three months ago the truck I drive was making about $6500/week. Now it is around $7500/ week and slowly rising. I have been pulling a 53' conestoga for over 3 years. I just found out that in 2 or 3 weeks I will be hauling some oversize loads from IN to OK on a tri-axle rgn for a few weeks. That will bring the pay up some more.

Sounds like things are looking good for you guys.

I'm feeling more confident right now. Confident enough that there is a possibility that on Monday I will be getting a new truck. The final numbers will be in on Monday and I will make my decision.

 

[389 Hood]

Looking at it all from the outside, the elimination of a lot of the non-allowed CDL holders is creating a void in the carrier market that needs to be filled. Drivers that are 100% compliant along with the larger freight companies have a little more bargaining power when it comes to negotiating the rates.

The ones that were low-balling just to get the wheels to turn are now being phased out. In order for shippers to get their commodities on the road and to the end user, they are going to have to realize the market is a lot tighter and they are just going to have offer up more incentive to get their freight moved. Fuel surcharges are greatly increasing too.