News

It’s a tale of two economies in 2021. The good news for trucking is that the goods economy will outpace the overall economy, and with no quick end to capacity tightness in sight, that should translate to higher rates for truckers. That was one of the conclusions from industry forecaster FTR during its most recent State of Freight webinar Jan. 14. Avery Vise, FTR’s vice-president of trucking, said contract rates should be up about 11% year-over-year in 2021, as they tend to lag the spot market by six to eight months. Spot market rates should also climb, about 4-4.5%, Vise added. Rates ended 2020 up about 3% versus 2019, despite all the volatility caused by the Covid-19 breakout in March. “It doesn’t look like much if looked at in isolation,” Vise said. “But if you look at what happened in 2020, it’s pretty amazing.” While there are some risk to FTR’s rate predictions, Vise said “I don’t think this can pan out to be a weak year for rates because of the capacity tightness that’s built in. Even if there is some weakness in freight below what we’re projecting, I don’t think we’re looking at a 2021 where [rate increases] are in low single digits.” Eric Starks, CEO of FTR, said this also aligns with anecdotal reports from fleets as they bid on contract freight. Since the pandemic hit in early 2020, the goods economy has recovered much more quickly and fully than the broader general economy. Vise expects that trend to continue, even though the goods economy has already nearly recovered to pre-pandemic levels.