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Supply Chain Graphic of the Week: US Truckload Rates are Starting to Soar


Mike Regan, JB Hunt Warnings Look Spot On Right Now

Jan. 4, 2018
SCDigest Editorial Staff


Mike Regan, an executive at TranzAct Technologies and well-known observer of the the US transportation market, has for several years warned that if the US economy ever started to grow again at a 3+% percentage rate, trucking capacity would soon become very tight and rates would jump much higher.


US GDP grew 3.1% and 3.2% in Q2 and Q3, respectively.


Meanwhile, in October, JB Hunt sent letter to customers warning truckload rates could soon jump 10% or more, largely due to the US driver shortage.


They just might both be right.


The Cass Linehaul Index measures per mile truckload rates in the US, before fuel surcharge and other accessorials, based on paying some $20 billion in freight bills annually for shippers.


As seen in the chart below, that Index is moving sharply up.



After being negative for 13 months on a year-over-year basis, the Cass TL Linehaul Index has not only been trending positive for eight months now, the amount of change continues to increase as well.


The Index has been up 4.2%, 5.5%, and 6.3% in September, October, and November, respectively.


Ouch! It may be time now to warn executives about transporation spend in 2018.

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