Trying to target why freight costs seem out of control is more or less like picking up darts for the first
time and trying to hit a bullseye. Much like the darts, you have several ideas in hand as to what is
causing it, but you’ll be lucky to find yourself hitting the bullseye. Instead, you look at the multiple
reasons, add them up and come up with an accumulation of what is causing the cost of freight to be so
Product scarcity – Through the pandemic manufactures have experienced; shutdowns, covid outbreaks, staffing shortages. All of these issues cause downtime and loss of production. With plants opening back up and there being an abundance of product to ship, the level of demand sky rockets and there is more freight than available Trucks.
Truck availability – For many years now the industry has been talking about the driver shortage and each year the problem at hand gets worse as drivers age out of the profession. Our industry as a whole has fallen behind the times on trying to recruit younger generations into becoming a CMV driver. Because of this and the reason stated above there is more freight available that trucks and for that reason companies are being more selective in what they will haul.
Cost of operations – Uncle Sam still has his hand out, Fuel costs more each day, and people are making more money sitting at home than they were working the assembly line. The costs of business overall is on the rise and so is the cost of employment. Businesses are having to pay more out to their employees to keep them so that they do not lose out to the businesses that are offering sign on bonuses or inflated wages. When this happens the costs per mile goes up and causes the rates to soar.
Try not to focus too much on the bullseye or you might just miss more points on triple twenty.