Ship.Cars’ index for truck transportation increased 3% between April and May, with tighter availability of drivers expected to keep prices up for the near future.
Explaining the jump: Fuel costs were a large part of the increase, with Vlad Kadurin, Chief Product Officer at Ship.Cars, telling CDG fuel prices influence about 20% of carrier costs.
Diesel prices peaked in May at $5.60.
Prices dropped in June before escalating again to $5.24 per gallon, according to AAA.
Other factors keeping prices high: Another factor Kadurin pointed out was that several carriers have left the market, decreasing capacity.
Employment is also down for drivers, contributing to decreased availability.
According to the U.S. Bureau of Labor Statistics and Federal Reserve, truck transportation employment is down approximately 120,000 people since 2022.
“We also see problems with CDL, which is also pushing drivers outside of the market. All those things push capacity down,” Kadurin said. “We also currently see that orders for Class A trucks and trailers are going up, which are the first signals for capacity entering the market.”
Sales not pushing capacity: Vehicle sales have stayed steady with a reported seasonally adjusted average rate of 16.5 million.
Dealer inventory-to-sales ratio has increased slightly from 1.42 months to 1.45 months, meaning vehicles are staying on the lot just a little longer.
Kadurin noted there is still steady transport work for “replenishment, auction moves, and dealer trades.”
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Stay with trusted carriers: Even as prices may be elevated, Kadurin cautioned dealers about fraudulent actors in the space stealing vehicles. More specifically, he pointed out that there have been hacking incidents that enabled misrepresentation and cargo theft.
Make sure carriers are insured correctly and have reliable technology for fraud protection.
Bottom line: Carrier prices are expected to remain elevated for the immediate future, especially until gas prices come back down. In the meantime, Kadurin advised dealers to build relationships with carriers and negotiate prices.
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