April is here, so time again for the monthly edition of Al’s Corner.
April 16th— We have the incredible Annual Dinner, sponsored by the St. Louis Transportation Club. The 2023 addition is at The Cedars Banquet Hall just south of downtown STL. Gates open at 5:00 pm with Open Bar networking time. The cost is $65 per person which includes dinner and a short presentation that includes honoring Todd TeBrink with this year’s Lifetime Achievement Award. Todd, who works for Alliance Shippers, is one of the most deserving award winners ever as he has always been so involved in working for and promoting our club. Plus, he is a longtime friend of mine who will always be one of my favorites! Our keynote speaker is Stefanie Stuckey, CEO-Stuckey’s Corporation. Great speaker choice! Vendor tables are also available for $150, contact Brad Reinhardt for more info.
April 12th—Multimodal Conference from 4 pm-5 pm at Knight Hall at Washington-St. Louis Danforth Campus. Networking session to follow. This event is brought to you by St. Louis Regional Freightway Alliance.
May 11th—Spring Golf Tournament at the Links at Dardeene. $95 per player, lunch, dinner, drink tickets, hole competitions, team prizes, and fun networking!
This month’s topic is—the State of Trucking as I see it. So far this year it has been a Shippers Market with freight rates being down depending on what, how, and where you ship to. It is amazing to me that I hear people say all the time in public how expensive EVERYTHING is that they buy. Then I say, “Did you know that freight rates are down quite a bit across the country?” Again, depending a lot on what a shipper’s lanes are. This month I decided that I would do a little investigating on truck and trailer costs that freight lines are experiencing to get a better feel for the industry. Even what the future may look like. I approached a few trucking companies and asked them about the costs they are experiencing now compared to what things cost a few years ago.
I found Pretty Stunning Increases in trucking costs, but not surprising.
*2022 till now 2023 —new tractor costs $175,000 with limited supply as well.
*Before 2019 to 2022—$140,000 for a new tractor.
*2022 till now 2023—$53,000 for a new van trailer
*Before 2019 to 2022—34,000 for a new van trailer
The net difference of around $50,000 has increased from then to now on both Tractor and Trailer combines.
Used equipment was 20-30% higher too.
Last year, when shippers were scared, transportation equipment was scarce, shippers paid VERY high rates, and the rates easily covered the truck cost increases. In late 2021 many shippers just raised their rates, in advance. So, even though it was shocking, the increases they added to their customers’ costs made it ok for many shippers.
Let’s look at Diesel:
Diesel National Price-2019 ———–$3.06 per gallon
Diesel National Price-2020————$2.55 per gallon
Diesel National Price-2021————$3.29 per gallon
Diesel National Price-1-03-21———$3.62 per gallon
Diesel National Price 3-28-22 ——–$5.10 per gallon
Diesel National Price 6-20-22———$5.81 per gallon
Diesel National Price 12-28-22——–$4.55 per gallon
Now as of 4-05-23 ————————$4.21 per gallon
Forecast for 2024 ————————-$3.71 per gallon
For all of you reading this (not many!!!), when you add up wages (not going down), costs of parts (still very high and scarce), and anything else you can think of not going down, why would trucking rates stay low or continue to fall? If the rates do stay low, or go even lower, carriers will fail (close), drivers will leave the market (starting to already) prices on everything will stay high and go even higher. Plus, the cost of borrowing money is a factor too (tight and very high).
So that is again a quick look at the market as I see it. Have a great month, AL.