Truckload rates are set to increase an average of 4 per cent this year as a result of an ELD mandate that is about compensating for economic recovery.
The economy has shifted from a high-growth economy to slower-growth but more consumer oriented with a growth at 2%. The industry is concerned for what will happen in 2018 and 2019, and the chance of a recession.
The ELD mandate could also cause a drop in volume and in pricing from 5 to 10 per cent. The impact of ELDs on late adopters is likely high, and it could take a few years before industry professionals realize they’ll have to do it.
Another mandate at play is President Trump’s proposed trillion-dollar transportation infrastructure program, but it hasn’t been decided who will be paying for it. It could come out of higher toll rates.
The FTR estimates that trucking pays 3 cents per mile to maintain an efficient highway system. Maintenance backlogs could double that to 6 cents per mile, and improving the system with additional lanes and highways will bring that cost to 20 cents per mile.
The industry forecast of 25% growth in the 2020s is exaggerated. With the national debt and transportation demand, it could grow by as little as 5%.