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Rising diesel prices increase trucking rates, masking effects on capacity and freight market trends.
Data from FreightWaves show how diesel prices are affecting trucking capacity and rates. Diesel prices for Class 8 trucks have soared by 16% since July, the steepest hike in nearly a year. This sudden spike in fuel costs is shaking up the trucking market.
What the Data Shows
Demand & Capacity
Shipper requests for truckload capacity have surged by approximately 15% since April, signaling increasing demand for freight transportation.
Despite the growing demand, carrier availability hasn't significantly increased. National rejection rates remain below 4%, far from levels that would significantly affect rates.
Costs Vs. Rates
With surging fuel costs, carriers struggle to transfer these additional expenses to shippers, particularly in a market with ample capacity. This dynamic is aggravated as retail fuel prices donβt adjust as swiftly as wholesale prices, adding more strain on contract freight. This financial pressure is exacerbating carrier exits, a trend anticipated to heighten this winter.
The increasing rate of carrier exits may soon narrow the market, impacting both rates and availability β shippers should prepare for a constricted market in 2024.
Source: FreightWaves
Trucking capacity continues to leave the market in September as net changes in operating authorities sharply fall. Looking at a decade plus of data, the extent of capacity destruction is starting to rival the boom seen during the pandemic. pic.twitter.com/Sw2vpF8cHb
— Thomas Wasson (@ThomasWasson7) September 15, 2023
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