- Tags : Transport & Logistics | National Trucking Services | Price trend | Price forecast | Procurement research | Category market forecast
Recent Price Trend - National Trucking Services
In the three years to 2017, market prices have been nearly stagnant, growing only at an estimated annualized rate of 1.2%. Increased demand for trucking services has been the primary driver of rising prices, although falling oil prices (and thus, fuel surcharges) have been keeping price growth slow during the past three years.
Rising demand for cargo transportation services, including truck transportation, has been the primary driver of increasing market prices. Total trade value has grown significantly, indicating that more goods need to be transported to and from major ports and hubs and boosting demand for carriers’ services. Additionally, the IPI has been rising, boosting demand for trucking services because the manufacturing industry accounts for roughly 60.0% of long-distance trucking revenue. As such, rising demand has allowed suppliers to raise service prices without fear of losing business.
Increasing wage costs to suppliers have also contributed to service price growth. As a result of regulations passed in 2013 that limit a driver’s allowable hours of service (see Regulation section), carriers have required more drivers and trucks to move the same amount of freight. As a result, suppliers’ have had to grow their workforce, causing their wage payments to rise. This rising cost has been passed on to shippers in the form of higher freight rates.
However, price growth has been relatively subdued as a result of declining fuel prices. Because changes in carriers’ fuel expenses are passed directly on to buyers through surcharges, falling fuel prices have effectively constrained growth in service prices, benefiting buyers greatly. However, significant year-on-year fluctuations in the price of crude oil have contributed to high volatility in the price of national trucking services. High price volatility detracts from buyer power by making it more difficult to budget for future national trucking service expenses, decreasing the attractiveness of long-term contracts. Nonetheless, buyers are encouraged to contract this market’s service sooner rather than later, before prices rise further through 2020.
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