Using Big Data to Understand Freight Rates
The trucking industry is a multi-billion dollar industry that enables our economy to stay up and running. Without freight hauling services, businesses and households alike would be without everything from food to toilet paper. Yet most people don’t really understand just how massive this industry truly is. More importantly, big data is paramount to helping the trucking industry overcome two huge concerns–the driver shortage and fuel expenses, these are the two main factors driving freight rates. Take a closer look at these two areas, by the big data.
Truck Driving Jobs Data
The biggest news we hear out of trucking is that there is a driver shortage. So far, the number of trucking jobs needed by the US is projected to increase throughout 2025, but how does employment for truckers look? According to the US Bureau of Labor Statistics, since January 2010 the number of trucking employees has risen from approximately 1.2 million jobs. As of May 2018, there are an estimated 1.5 million people working in the trucking industry.
Regarding how many actual jobs there are, the BLS states that as of 2016 there is nearly 1.9 million truck driving jobs. This indicates that there is a driver shortage with nearly half a million jobs, which is what the industry leaders have been telling everyone for years now.
What this means for your heavy equipment hauling services is that the market for driver services is far more competitive. You may likely see increases in freight rates across spot markets due to the lack of drivers. In addition, trucking companies are competitively offering better pay rates to try to recruit more drivers. This also has an adverse effect on the total expenses of trucking, and in the future, we may see freight rates continue to rise because of it.
Operational Costs of Trucking
Another key area to consider is the overall operational costs of trucking. In the trucking industry, trucking companies of all sizes have the same proverbial slices of the pie when it comes to freight hauling expenses. According to the American Transportation Research Institute, the costs of trucking encompass:
- Fuel expenses at approximately 40 percent of total expenses
- Truck lease or loan payments at 10 percent
- Truck maintenance and repairs at 9 percent
- Truck insurance at 4 percent
- Licenses and permits at 2 percent
- Tires at 2 percent
- Tolls at 1 percent
- Driver wages at 26 percent
All of these expenses have an impact on the price of freight rates. For example, when the price of crude oil goes up, we see an increase in diesel prices and freight rates as a result. Speaking of fuel, this is by far the biggest chunk of any trucking company’s budget. As a result, it is easy to understand how fuel prices can directly affect freight rates.
However, when there are increases in interest rates, those loan payments and lease costs start to rise. The point is, whenever the economy affects an area of operational costs of trucking, this directly affects the costs shipping customers pay.
Big Data Bottom Line
The combination of the driver shortage and the rising costs of fuel are only part of the reason why freight rates are steadily increasing. As you can see, it is far more complex than any single answer. Other factors that cause rates to spike include natural disasters, the seasons, and social chaos. Instead of trying to keep track of the best freight rates for your heavy equipment hauling needs, we recommend turning to the experts.
At Loadstar Transportation, we are a Landstar agent offering access to thousands of freight haulers in an instant. In fact, we have more than 10,000 trailers waiting to haul your freight today. We specialize in flatbed, dry van, heavy haul, expedited, LTL, and intermodal freight hauling services in the US and Canada.
Whether you are looking for freight rates or heavy equipment hauling services, Loadstar Transportation is here to work for you. Contact our office at 877-851-1539 for more information or to request a quote. Our crew looks forward to assisting you with your shipping and freight needs.