Strong freight, rates environment expected to last through 2022

From Overdrive Online.

As any independent who follows trends in freight and rates will surely know, the current trucking environment is one of the best in history from a demand perspective, and that strong environment for rates is expected to continue.

ATBS President Todd Amen, in an Overdrive’s Partners in Business webinar Thursday (the replay is above), said all signs are pointing to the current cycle lasting through the end of 2022.

“We’re already 18 months into this cycle, and by all accounts … a traditional trucking cycle will be somewhere between 12 to 24 months of good for the truckers and then it’ll be three to four years of bad,” he said. “So it’s like quick up, and a slow, gradual decrease when you think about rate and freight cycles. By all accounts, we’re already most of the way into a really good freight cycle, and it should turn.”

However, “Most people are saying this could last all the way through 2022,” he added, “which would be amazing. It would be a 30 month-plus. almost-going-on-three-years positive freight cycle for truckers, which is incredible.”

As previously reported by Overdrive, average owner-operator income is at an all-time high at more than $70,000 a year, a 10.2% increase over 2020, according to ATBS. That increase has been driven in large part by the spot market, where rates have jumped considerably with lower capacity and more freight after the early COVID shutdowns last spring.

A lack of drivers due to a variety of factors, including the Drug and Alcohol Clearinghouse, an aging driver population, a booming economy possibly pulling drivers away from trucking and into other industries and more, coupled with the slowed-down ability to purchase new trucks because of parts shortages, is keeping capacity at an equilibrium as demand explodes. That’s keeping rates high.

See the complete article at Overdrive Online.