April 2 2018
|
The Journal of Commerce 39 www.joc.com
Surface Transportation
February that it is up-charging
some shippers in Atlanta, Chicago,
Dallas, Los Angeles, and Seattle this
winter. One shipper said the higher
fees range between $150 and $600,
although Hub said there is not any
minimum or maximum rate. Schnei-
der National and Covenant Trans-
port also are assessing fees on excess
business to cover their additional
costs to reposition equipment from
nearby cities or states. Regularly ten-
dered freight isn't subject to these
upcharges, only freight not covered
in the shipper-carrier contract.
For the past two years, business
conditions favored shippers as con-
tract rates remained low and drivers
bid against each other to move the
sparse freight available on the spot
market. Freight demand began to
improve steadily in the second half
of 2017, when trucks weren't as easy
to find.
Hurricanes Harvey and Irma in
August and September drove a new
pipeline of disaster relief shipments
MULTIPLE TOP NATIONAL truckload
companies are levying surcharges
or rejecting freight because of the
overwhelming demand in the typical
slow season, frustrating shippers
looking for additional capacity. This
also has trucking officials warning
of an even sharper crunch when
produce season picks up in April and
retailers stock up for the summer
and early autumn.
Trucking companies are busy in
the third and fourth quarters when
retailers stock the shelves for the
holidays and in the spring when
growers sell fruits and vegetables
and stores begin to stock up on bar-
becues, lawn care products, outdoor
items, and, eventually, back-to-
school items. Demand in between
those periods typically tapers off,
but that is not the case this year.
As a result, motor carriers are
struggling to find the trucks needed
to satisfy their shippers asking for
more service.
Hub Group acknowledged in
and long-term reconstruction
supplies. The new business opportu-
nities flushed excess capacity from
other US markets months ahead of
the electronic logging device (ELD)
mandate in December.
With the new federal regula-
tions requiring strict adherence to
hours of service because of ELD
monitoring, drivers are unable to be
as productive each day as they were
with paper logs. Rates have climbed
as shippers vie to book appointment
windows in these tight schedules.
Drivers upset with the new federal
intervention into their lives may
leave the industry after hard en-
forcement begins on April 1, further
exacerbating the supply shortage.
"A year ago, the freight wasn't
there. Today, we may be pulling a
truck away from someone who has
freight nearby," Jason Rice, director
of customer service with Covenant
Transport, told The Journal of Com-
merce. Covenant offers long-haul
dry-van and temperature-controlled
trucking through its brand and
subsidiaries Southern Refrigerated
Transport and Star Transportation.
Repositioning fees or similar sur-
charges are unusual between January
and the beginning of produce season
in early April unless there is a weather
emergency. This year, however, freight
demand is outpacing the supply of
trucks, according to industry officials.
"I've been in the trucking industry
since 1980, and I've never seen the
balance being this out of whack," said
Dave Rusch, CEO of truckload carrier
CRST International. "In our flatbed
US truck shippers
feeling the pinch
Carriers are levying surcharges and turning down
freight as capacity and drivers lag growing demand
By Ari Ashe
Schneider National
is assessing
surcharges
on excess
business to cover
additional costs
of repositioning
equipment.
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