Trucking rates in the U.S. are shifting into high gear, according to the Wall Street Journal.
Spurred by a strengthening economy and rising diesel-fuel prices, many trucking companies are imposing their steepest price increases in years, the Journal reports. It cites the example of Schneider National Inc., one of the largest U.S. trucking carriers, reporting customer demand exceeding its supply of 14,000 tractors and 40,000 trailers by as much as 10%.
Schneider, based in Green Bay, Wis., is boosting shipping rates by 5% to 7%.
"The market for trucks is so tight we are able to pass along higher costs," Tom Nightingale, Schneider’s vice president of corporate marketing told the Journal.
The truck capacity crunch has not disrupted American supply chains yet, though some shippers are being forced to schedule pickups two days in advance, instead of the same-day service they could expect when business was slower. Still, surging trucking rates are starting to ripple across the wider economy, including higher retail prices for some products, the Journal commented.
“This is the most severe year we have seen in many years” for trucking costs, Carroll King, director of logistics at Hormel Foods Corp. told the Journal. The Austin, Minn., food processor is passing along its higher transportation expenses as part of a 4.5% to 6.5% price increase in June on Spam canned meat and hundreds of other packaged foods.
Trucking industry consolidation over the past few years has reduced the supply of trucks and established players aren’t rushing to add trucks to their fleets the Journal states because of a shortage of truck drivers.
Thomas Albrecht, an analyst at BB&T Capital Markets, told the Journal he expects American trucking companies to boost rates by 8% to 10% this year, including fuel surcharges.