Why Have Trucking Costs Increased Lately?
Member Services Representatives noticed that trucking prices have recently increased, so we reached out to Mike Schafer, Sales Team Leader at Total Quality Logistics (TQL) to ask why. Basically, there are a lot more full tractor trailer loads of recyclables available right now than there are trucks. Once COVID-19 started and businesses shut down, there were many more trucks than there were loads due to all of the closings and businesses not shipping material. Those factors drove the cost of trucking March-June of 2020 way down to where drivers weren’t making a whole lot of money and it put about 80,000 of them out of business. That’s why the hauling market started to tighten up in the second half of last year.
After the unusual frozen temperatures in Texas, there were a large number of trucks stuck down there unable to get loads off of their trucks due to road conditions, power outages, and diesel shortage. This had a ripple effect across the country that is still being felt because these trucks couldn’t get out of Texas to other areas of the country to pick up loads, causing tightness all over the place. Whenever there are more loads than there are trucks, the carriers know they can hold out for higher rates and basically hold their truck for the highest bidder.
Another contributing factor to the increase of trucking prices is due to the factories overseas (mostly China) that are shut down. This has caused the rail, drayage (transport of goods), and ports to be severely congested. Incoming orders are backed up and are now starting to fill the ports. Normally, many businesses would move their products via rail. Now there is extremely limited capacity via rail so businesses choosing to move their products have to do so via trucks, where there is already a shortage. So the story of increased hauling costs involves more than recycling material, but the whole transportation system.