Truck rates rise as U.S. freight capacity tightens

Consumer spending surged in 2020, with a knock-on effect on the supply chain, with freight demand leading to higher shipping prices and warehouse rents, as well as reduced capacity.

Recently, North America's largest trucking carrier said it is stepping up efforts to hire more truck drivers to meet U.S. freight demand as consumers continue to spend, leading to a surge in demand and tight transportation capacity. To this end, some U.S. trucking companies said that the wages of freight drivers have been raised by at least 40% in recent months .

This is also related to the fact that online orders continue to rise as federal measures stimulate consumer purchases. Due to strong consumer demand, inventories have declined compared to sales. In addition, as the supply chain seeks packaging for e-commerce orders, demand and prices for corrugated paper have reached new highs.

Industry insiders predict that as the government continues to implement relevant assistance measures and the COVID-19 vaccine becomes more widely available, US consumer spending will continue to grow, and its freight volume will also maintain a strong growth trend. At the same time, relevant carriers will have to increase the wages of freight drivers to meet the unexpected market demand, which is likely to drive up transportation prices.

Relevant data show that in February 2021, truck freight rates continued to grow, causing the cost of truck loading and unloading per mile in the United States to increase by 8.1% compared with the same period last year , which was the largest year-on-year increase since October 2018. By March 2021 , the proportion of available loaded trucks had more than doubled compared with the same period last year, and the average cost of renting a large truck had risen by 41.9%.

The growth of e-commerce has not only led to an increase in freight costs, but also an increase in demand for warehousing space. It is reported that the growth in e-commerce sales has prompted many companies to need more warehouses to store goods, which has further led to a decrease in warehouse vacancy rates and an increase in rental rates in the United States.

For the relevant sellers, even slight fluctuations in freight prices can have a huge impact. The blockage of the Suez Canal some time ago is a good example, not to mention that truck freight rates in the United States are also rising.

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