When it comes to the market for truckers, from a historical point of view, the holiday season is known for increased demand and shorter deadlines, which offer truck drivers more opportunities for earnings. However, this year, we expected the produce season to offer better rates, and after it, the peak season, but either didn’t live up to the expectations, with rates that kept dropping. This outcome leaves us wondering whether or not history will repeat itself once again and how the holiday season will pan out.
Another thing to keep in mind is the reason the rates started dropping in the first place. When available capacity grows, it leaves brokers plenty of space to lower prices, knowing that with the growing number of drivers at hand, someone will have to accept their offer. So no matter how much freight is available, when accessible capacity exceeds these amounts, rates are going to drop.
You’re probably wondering why this is relevant for the holiday season. Well, holidays usually make people want to spend more time with their families and call for a festive mood. They tend to spend less time on the road, which means capacity is now shortened. For drivers willing to postpone their family gatherings, this is a great opportunity to increase their earnings.
Speaking of capacity, during the summer of 2023, statistics reported a very slight but still significant drop in the number of dispatchable trucks compared to last year. There are substantially more trucks right now than there were in 2020, after which we’ve seen a constant drop in rates. It is estimated that the number of trucks grew by at least 12,000 between 2021 and this year.
On top of that, the price of diesel keeps increasing, directly affecting expenses. The Middle East is one of the largest oil suppliers, and with the current conflict between Israel and Palestine, fuel prices are expected to skyrocket once again, which will, in turn, directly impact operational costs for the trucking industry.
To clarify, the Israel-Palestine conflict might pose a risk to the global supply chain by causing supply disruptions, delays, and increased expenses. So far, the Middle East’s oil and gas flow has stayed mostly unaffected, so we have to wait for further developments before evaluating the situation’s effects on the current market.
In light of all these challenges, the coming months leading into 2024 are expected to be turbulent. The holiday season brings both optimism for increased earnings and concerns about current rates. Ultimately, things that need to be considered in the next few months include supply and demand, rising fuel prices, and geopolitical conflicts.
The big question on our minds is how the freight business will handle these curveballs. We’ll monitor the situation and update you with more information in the future, with the welfare of drivers in mind. In the meantime, whether you’re a new or seasoned OTR driver, you might want to remind yourself what to focus on in the upcoming months, and we’ll support you! Let us know your thoughts by calling (630) 506-8869.