Supply & Demand… Rates Are Up!

An interesting article appeared in the Wall Street Journal just the other day talking about the need for more trucks and drivers. In addition, due to more manufacturing and a better economy overall, transportation rates are going up.

This is good for everyone, especially freight brokers. As brokers earn their money on a percentage of the gross, it only makes sense that the higher the gross the more money for the truck and broker.

Trucking is a business just like any other, and is affected by supply and demand. A topic thoroughly discussed in training. The higher the demand when supply is limited, means something must change. Either the demand needs to come down or the supply needs to go up. If it doesn’t, someone is going to pay more. In this case it’s the shipper.

A manufacturer can only stay in business if the product manufactured is successfully delivered to their customer. If they can’t deliver, they won’t be in business long. In order for the manufacturer to attract trucks to transport their product they have to raise the rates.

As a broker, our primary purpose is to assist trucks with backhauls. A backhaul provides the truck with a load to a specific destination so that the truck can service their own contracted customers. Trucks understand that when they use a broker for this purpose, the broker takes a percentage of the gross. The broker makes money, and the truck is happy as they have a paid load to their desired destination.

2018 is already shaping up to be a banner year for the transportation industry and a great time to be working as a freight broker.

Thanks, and talk soon…