Spot Market Freight Disruptions Coming - Don't get Complacent! + Top Paying Loads in Trucking

There are spot market freight disruptions coming to the trucking industry and truckers should be ready. The FMCSA has seen a record number of new motor carrier (MC) approvals with 51,000 approvals through June 2021 while 2020 saw 59,000 registrations throughout the entire year.

Spot market freight may become disrupted with the large number of new companies entering this tight freight market segment. The majority of the new entrants are small 1 - 2 truck entities. Most of these truck drivers are ex-company drivers and leased-on owner operators who were cut loose during Covid shutdowns and economic slowdowns of 2020.

This is unlikely to represent an increase in new driver capacity unless carriers are able to hire replacement truck drivers. Otherwise it's basically a wash. The approvals of the past 12 months dwarf prior high points of late 2017 and 2018 after rates spiked with the ELD mandate.

Currently truck utilization is at a record high, running about 10% higher than the 10 year moving average. In addition to this, truckload rates across the three main segments of flatbed, refrigerated, and dry van are at record highs.

These disruptions of spot market freight are expected to level off rates in 2022 but still remain historically elevated. Spot market shippers and carriers will face a productivity challenge if more truckers go out on their own.

In the long run, these spot market freight challenges will ultimately make the American truckload freight markets more efficient because more of the new carriers will enter freight markets with high load availability and low capacity.

At this point, the next 12 months are expected to have lots of disruptions and productivity issues in the trucking industry. This is the most likely outcome.

With the influx of new carriers entering the truckload spot market, it's important that carriers not get complacent as customers may look elsewhere for more predicable and affordable shipping services.

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