2018 Rate Outlook by Lane Guenther

Lane Guenther Strix Transportation Executive

Energy Costs, Economy, and a 'Trucker's Market' - A quick read on Lane's Rate Outlook for 2018.

Economy

According to leading economists, the best global growth rate in seven years (3.2% in 2017) has plenty of staying power for 2018 and will continue to push rates up and keep capacity constrained. Sarah Johnson at IHS Markit adds, “Were it not for the hurricanes, GDP growth in the third quarter could have registered 3.5%. At this time, the underlying momentum in the economy is strong, and we forecast real GDP growth of 2.2% in 2017 and 2.5% in 2018—and this lowers the unemployment rate to below 4% in late 2018.”

Energy Expenses on the Rise
 

In regards to the oil market, Saudi production increased in both the second and third quarters of 2017.  It appears that the Saudi’s are happy to lift production so long as oil prices increase.

How does this affect the consumer?

 According to Derik Andreoli, Ph.D.c, the director of economic research and forecasting at Mercator International, “This does not bode well for the consumers, as prices might surpass the $70 mark to end 2018 on an even higher note.” Experts note that the direction of the oil market is largely in the hands of Saudi Arabia, and even Kuwait.

Prices for 2018 are increasingly hard to predict but are trending towards energy getting more expensive for 2018.

Trucker’s Market
 

2018 looks as though it’s going to be a “trucker’s market” for domestic needs.  Supply/demand is tight, and the economy continues to grow at a slow but steady pace. Don’t be surprised to see an increase in rates coming across your desk this year. The ‘driving’ force behind the supply/demand issues is largely due to the fact that it’s increasingly difficult to find qualified and drug-free truck drivers.

 This, as we all know, is nothing new as the industry has been struggling to recruit and retain drivers the past few years. The ELD (electronic logging device) mandate may add insult to injury. 

 LTL carriers are benefitting from e-commerce and the automation of manufacturing. For 2018, you can expect to see some acceleration in LTL rate increases.

At Strix pride ourselves in staying up-to-date on the global and domestic trade market and are working with our customers to get the best service and competitive rates out of the market.  We continually strive for being well informed and keeping our clients at peace.

Should you have any questions about what to expect in 2018 or need domestic trucking quotes, connect with me today at 406-922-6534 or email