Heavy Duty Trucking, June 2018

HDT JUNE 2018 18 WWW TRUCKINGINFO COM Hotline TRUCKINGS MOST RESPECTED BUSINESS REPORT Regulatory implications on truck capacity You may have heard the truck market is tight A modestly strengthening economy severe weather and regulations are all having their impact Regulatory impacts on capacity are difficult to assess because of the fragmented and fungible nature of trucking We also have to account for how different regulations create different impacts on a truck or drivers utilization One regulation may limit how much drive time is available Another reg may limit the potential driver pool making it more difficult to find that next driver Finally other regs may reduce the effective speed at which they can operate FTR is able to turn those impacts into identifiable capacity reductions We can convert the losses and occasional gains in productivity into an assessment of how much overall capacity has been removed from or added into the system As you can see from the chart the overall loss of capacity in 2018 260000 equivalent trucks is roughly equal to our current driver shortage 289000 in Q1 That is because the majority of our shortage is being caused by losses of productivity due to regulations Without ELD implementation CSA hours of service changes and several other regulations the current shortage would be well under 100000 drivers This would put us in a tight but highly manageable capacity environment Add in accelerated economic growth and severe weather and we Its really incredibly irresponsible of any journalists with integrity to write an article that would lead people to believe that autonomy is less safe Because people might actually turn it off and then die Tesla CEO Elon Musk in earnings call as reported by Marketwatch SPOT FREIGHT INDEX Information provided by DAT Solutions 2014 2015 2016 2017 2018200300400500600700800DECNOVOCTSEPAUGJULJUNMAYAPRMARFEBJAN DEC INDEX YEAR 2000 100 Flatbeds lead record setting April Spot truckload freight volume had the strongest April on record despite slipping 68 lower compared to March a common seasonal trend Compared to the same month in 2017 freight availability rose 32 according to the DAT North American Freight Index Flatbeds contributed disproportionately to the volume increase with a 59 boost compared to a year ago Flatbed freight rates set another record in April at 265 per mile including fuel a 12 cent increase over the previous record in March Flatbed rates were a full 58 cents higher in April than in the previous year expect to have the tightest market on record more than double the length of the last fully utilized marketplace in 2004 when HOS changes and economic acceleration both hit at the same time Should you expect the market to change soon There are no major additional regulations coming down the pike in 2018 and 2019 but as long as the economy stays strong there is only limited ability for trucking to add enough capacity to significantly change the current environment As the farmers say make hay while the sun shines Jonathan Starks FTR For more information visit www ftrintel com HDT or call 888 988 1699 Regulatory Capacity Implications1000000 100000 200000 300000200420052006200720082009201020112012201320142015201620172018Annual Change in CapacityLoss of Vehicle Capacity due to Regs CumulativeEquivalent Vehicles Lost or Gained DAT Spot Freight Index April 2018 SOURCE FTR