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It’s the most wonderful time of the year! (Or, for some, the most chaotic time of the year.) The stores are full, everyone is hustling and bustling from one event to the next and there’s tinsel everywhere you look.
The season is painted in sugar plum fairies and gumdrops, icicles and twinkling lights, but the trucking industry feels anything but sparkly right now. It’s been a tough year; the further we get into next year the better.
Thankfully we’ve only got one more month of the year to go and then we can hopefully move on to better things in 2024.
Here at Anderson Trucking Service (ATS), we’ve been feeling the market changes right alongside you all year long. Like all trucking companies out there, we’ve had to adapt in order to succeed. The more you know about the market, the easier it’ll be for you to do the same.
In this December update, you can expect to learn the following:
- November recap
- December freight rates
- December freight availability
- Supply and demand in December
- Tips for success in December
Keep reading for a comprehensive understanding of what’s to come and tips for how you can adapt to succeed.
What Happened in the Trucking Industry in November?
November saw a lot of trucking companies struggling. Some large publicly-traded companies had Quarter 3 reports that showed major debt but they’re still hanging on. Other companies were forced to close.
In fact, we saw Minnesota-based Twin Express Inc. default on a $19 million loan. The company has been around for 35 years. They hauled general freight and refrigerated freight. The court ordered the liquidation of their assets (converting assets into cash) to pay back the loan. This left 73 drivers without a job.
Rumors are flying around from drivers about late payments and hiring freezes at other trucking companies, but there’s been no official word on any other large companies closing. We may see a big company fall in the near future, though, based on this insight.
To round out a volatile month, we saw Covenant Logistics pay a $700,000 settlement for discrimination allegations.
While Morgan Stanley had predicted we’d be slightly performing in November and December, they’ve switched their rating back to underperforming.
The DOT finalized a rule requiring states to track vehicle CO2, something they’ve been going back and forth about. This rule supports the Biden administration’s goal to cut carbon pollution by 2030.
Rates continued to stay fairly flat throughout November.
Freight Rates in December
Nationally, van rates were down in November by one percent and cost-per-mile (CPM) is the lowest we’ve seen in months. Flatbed rates were down two percent in November. These trends are expected to continue.
On the bright side, reefer rates went up four percent in November — specifically out of the mountainous states and the West Coast with drivers moving produce and Christmas trees.
In December, we’ll still be seeing low freight rates for most of the country. However, during December and throughout the winter, freight coming out of the Midwest will have higher rates than the national average. Estimates place rates at about 10 percent higher across all freight types.
A lot of drivers don’t like going into the Midwest during the winter because of the cold and snow. That’ll boost rates and open up capacity for drivers willing to endure the elements.
Many companies are in the middle of bid season now. With contract rates getting locked in, we’ll see spot rates affected soon.
Freight Availability in December
We did see a small holiday push in November and might see one at the start of December, but it’ll die quickly. Historically, freight starts to slow down at the end of December and this year will be no different.
However, a lot of drivers tend to take time off around Christmas. This can open up some capacity for you should you decide to stay out on the road.
Supply and Demand in December
We’ll see swings in supply and demand throughout December, as is normal during the holidays. A lot of drivers are taking time off which opens up loads for other drivers to haul. The Market Demand Index (MDI) — the ratio of loads posted to trucks — always finishes strong at the end of the year because of this.
However, as we’ve seen throughout the year, the number of drivers still outweighs freight availability. Capacity is expected to leave the market at the start of the new year, but until that happens, experts say we’re bumping along the bottom when it comes to rates and freight availability.
Navigating the December Trucking Industry
Drivers opting to spend a lot of time at home during the holiday will open up your opportunities during December, especially at the end of the month. Consider implementing one of these tactics to boost your income as we close out the year:
- Skip holiday home time; take your vacation in January, February or March
- Take loads into the Midwest
- Follow safe winter driving practices
- Watch market trends
Let’s dive into each strategy further.
Hold Off on Holiday Home Time
Now, we’re certainly not saying you should skip the holidays with your family and loved ones, but if you’re looking to boost your income, working through the holiday is one way to do it.
A ton of drivers will be home, which means there’ll be a lot of loads and good rates for the drivers who decide to stay on the road. If you want to take advantage of these rates, consider saving your home time for January, February or March when freight is notoriously slow. You may also consider taking fewer days at home. It’ll be a nice boost to your wallet to end the year.
In a market like this, be smart about your home time.
Head to the Midwest
Consider taking loads that bring you into the Midwest, where fewer drivers want to go. As we come into winter, drivers will be moving south to avoid frigid temperatures and poor road conditions.
Take advantage of this by going where other drivers won’t, like the Midwest. Freight rates will be 10 percent higher than the national average. As long as you watch the weather, take it slow and give yourself plenty of time to stop on wintry roads, it’ll be a win-win for you to move freight in this market.
Follow Winter Driving Strategies
Winter roads require you to adopt a whole new set of driving strategies to keep yourself and those around you safe.
Trip planning is essential. Keep an eye on the forecast and give yourself plenty of time to arrive at your destination; no one likes a late load and now isn’t the time for poor customer service. Pull off the roads if you feel unsafe and communicate adjusted timelines with your trucking company and customer. It’s better to miss a delivery than to put it in the ditch.
Lower your speed, increase your following distance and give yourself plenty of time to stop. Make sure you keep your truck stocked with extra supplies too, including tire chains just in case.
Watch the Market
Look at FreightWaves and Truckstop to keep an eye on the market. Truckstop provides regular MDI updates and shows how variables cause it to rise and fall.
You’ll get an idea of what’s happening with supply and demand and freight rates depending on the region.
Check these sites regularly so you can make smart decisions about the freight you’re hauling.
End the Year on a High Note
In the hustle and bustle of the holiday season, the trucking industry finds itself navigating through a challenging landscape. Despite the tinsel and festive cheer, the past year has been marked by fluctuations and hardships. As we stand on the cusp of a new year, the road ahead for 2024 seems promising, but the present requires some adapting.
Reflecting on November, the industry weathered its share of struggles. From companies grappling with debt to closures that left drivers without jobs, it's been a volatile time. December arrives with its own set of dynamics.
Navigating these December waters demands strategic choices. Options include forgoing holiday time for financial gains, seizing opportunities in the Midwest, employing safe winter driving protocols and closely monitoring market trends. With these strategies, you can capitalize on the unique conditions of the season.
As the year draws to a close, the insights shared here aim to equip you with a comprehensive understanding of the landscape, empowering you to make informed decisions and navigate the December trucking terrain successfully.
As always, you can subscribe to the Drive4ATS Learning Center for more insight on trends, how-tos and career advice.