Hotshot Rates 2019

This movie might seem like a beat down, but you need to keep watching to the end….

As you know, I like to be as transparent as possible and keep our carriers abreast of the market trends that affect your bottom lines.

Spot freight pricing is 20 percent lower than a year ago.

Some of you have already been feeling that.

Rates are down 20%
— Keep your eye on the finish line

The best strategy is to continue following the freight areas that allow you to keep moving as much as possible. There's not enough margin to take risks and go to out-of-strategy areas.

Hotshot carriers are down $967 right now.

Advice: Don’t be overly picky on loads

Take what you are offered if it provides reasonable revenue. That will minimize the drain of fixed costs, such as insurance and truck payments, which need adequate revenue to cover their share of your operation.

We anticipate lower miles & rates in 2019
— Be flexible!

Stick with strategies. It’s a marathon, not a sprint race

Shorter runs does reflect on a daily earning that is lower than those longer miles. However, they do help to pad you from the losses that can occur when you risk rates that land you in no-mans' land.

Truck density (new authorities) is up 20%, just in the past 5 months

Volume is just plain down....tariffs, tax changes, borders, you name it. Add to all that, there has been a 20 percent increase in new authorities in just the past two months of 2019. You already know what truck density does to rates.

The cycle is somewhere near the bottom of a steep deflationary slide that began fall 2018 and has continued. (Come back Freight Season, come back. We miss you!). We're at the lowest level yet.

Freight volume (number of loads) is down >10% since this time last year.

freight volume.jpg

This industry is very cyclical - with big swings in both directions.

Downtick in freight volume (number of loads) by 1-2% and an increase in truck capacity by 20% just in the past five months - well that makes for rate changes all carriers are feeling.

Owner-operators’ miles were down 7.3% in the year’s first quarter, compared to the same period in 2018, no surprise after freight demand began slipping late last year.

Enough crying
— Blow your nose already

Ok, enough crying. Put that tissue away.

What goes down must eventually turn up. Truck pricing is highly cyclical. Any seasoned carrier will know that you can't hold out for one set rate all the time.

Likely, we have one more quarter to go before we hit the turning point. It's expected that rates will shoot up in the fourth quarter of 2019 and first quarter of 2020 - and they will not fully peak until late 2020 or 2021

That will once again lift rates higher.

2018 was a record demand and tight truck capacity pushed rates into phenomenal revenue.

Just like that peak passed, this 2019 famine, too, shall pass.

Your goal here is to remain steady, use strategy to stay alive. Stick it out and be smart. 2019 may not be a victory run, but we here at LTL RIG are coaching you all to persevere. You'll make it past this and come out on the other side with your business intact.

Maybe this Sunday, as you sit in your cab, log into Netflix and watch movies where the underdog persevered and came out the winner in the end. Right now, your movie is just half way through....you've got to watch it all the way to the end to see that prize.

The movie isn’t over
— Just wait to the end

Spoiler alert

It’s all about strategy, working hard and being flexible. Good job you guys!

Take what you are offered if it provides reasonable revenue. That will minimize the drain of fixed costs, such as insurance and truck payments, which need adequate revenue to cover their share of your operation.


5/13/2019 UPDATE:

We do not want to talk politics, but we did want to share some outside information that can help you understand the current market. There is a direct correlation with freight volume & rates, with the tariffs. The recent announcement for increased tariffs of USA inbound products has had an almost immediate impact on volume this week.


More market effects:

Impacts of the business that make & need to move freight:

Click on image for full news report - these are the businesses you move freight for

Click on image for full news report - these are the businesses you move freight for

Jill Michael