Higher Shipping Rates Will Have Staying Power

Shippers will pay more to trucking companies for a while. A “perfect storm” of surging demand, a driver shortage, cold weather, and tighter safety regulations boosted rates in January by as much as 40% from a year ago. Although the extremely cold weather requiring temperature-controlled trucks has eased, the other factors are still pressuring shipping costs. Spot rates will keep rising, though at a slower pace, until mid-year, but contract rates will rise until mid-2019, according to Avery Vise, vice president for trucking research at FtrIntel.com.

The driver shortage is worsening, when the country is already down approximately 50,000 drivers, as estimated by the American Trucking Association. New safety regulations requiring electronic logging devices (ELDs) on trucks that record actual driver hours, which make it easier to enforce hour limits, are one factor. Larger trucking companies have already adopted these, but many independent truckers will delay until enforcement starts in April. This additional squeeze on driver availability is the reason the shortage may get worse before it gets better. Continue reading “Higher Shipping Rates Will Have Staying Power”

Steel Prices on a Sharp Upswing

Prices for steel will rise through early 2017 on the expectation of more infrastructure spending by the Trump administration and robust construction of hotels, office and school buildings. Over the longer run, though, production overcapacity in China will help temper increases.

The cost of steel plate products, used in bridge construction, pipelines, etc., are already up sharply—a 20% increase since the presidential election. Buyers are also shelling out 7% more for steel-reinforcing bar used in road and bridge and building construction. Also up: Prices for hot- and cold-rolled steel, used to make cars, appliances and more. Hot-rolled steel is up 14%; cold-rolled 11%. Meanwhile, scrap metal is selling for 16% more. Continue reading “Steel Prices on a Sharp Upswing”