The highest share of carriers (83%) reported average rate increases in the recent Second Quarter Business Expectations Survey by Transport Capital Partners LLC (TCP). This compares with the first quarter’s survey, where half reported average rates rising over the prior three months “The responses were also notable for the most reporting average rate increases over 15%, the most between 10 and 15% reflecting both breadth and magnitude in a quarter noted for high contract bid activity,” said Richard Mikes, TCP partner and survey founder.
“This lays the groundwork early for more strength in the last half and likely the reason behind the high rate expectations for the year ahead reported in the same survey,” said Lana Batts, TCP partner.
A higher share of larger carriers (more than $25 million in revenue) reported rate increase up to 5% versus smaller carriers; however, 31% of smaller carriers reported average rate increases of more than 10% compared with 21% of larger carriers.
Mikes said, “These tie into the upbeat expectations for industry volumes and rates in the coming year by carriers responding in the survey and in conversations with TCP partners.”
Batts and Mikes said this level of average rate increases over the past three months in the survey correlate with conditions forecast in an earlier TCP white paper and are generally still on target favoring carriers.