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Freight Cost Increases Are Likely in 2018 – How Will it Impact Your Business?
You may have noticed that some freight companies like FedEx have already announced rate increases for 2018. This is part of a larger trend impacting LTL (Less Than Truckload) shipping, and ICT is preparing for potential cost increases in the coffee chain.
There are numerous factors contributing to rising costs, among them a shortage of truckers, but perhaps most crucial is the implementation of new ELD (Electronic Logging Device) requirements in the trucking industry. The ELD mandate requires all trucks to electronically record a driver’s Record of Duty Status (RODS), which replaces the paper logbook some drivers currently use to record their compliance with Hours of Service (HOS) requirements. This program is designed to improve road safety, but one expected impact is a likely capacity decrease of at least 10%.
It is of course impossible to predict with certainty the exact impact reduced productivity and capacity will have on freight costs, but ICT concurs with industry analysts that rising costs are overwhelmingly likely in 2018. It also seems probable that these increases will be distributed unevenly in geographical terms, with shipments to locations farther from major terminals seeing the greatest percentage increases.
ICT will monitor events and keep our clients informed in a proactive manner. For now, customers should be aware that shipping expenses are likely to increase in 2018 and budget accordingly. Of course we will be as aggressive as possible in procuring the best available shipping options for our clients.