Trucking Costs

Aug 8, 2022 | Finconomics 101

Summary: Trucking spot rates have been falling as fuel and operating costs skyrocket, putting many small players out of business. According to industry insiders, many new small truckers threw their hats in the ring at the start of covid and even now there are many mom & pops coming into the business who lack the financial acumen to negotiate shipping spot prices sufficiently high to cover their costs. This dynamic is ruining business for the legitimate small truckers who can’t survive on the drop in spot prices that all this excess competition has caused. Further, shippers are shifting their business from the short-term spot market to the long-term contract market which is served by large trucking companies that offer more professional services than the small fly-by-night truckers who don’t know how to negotiate the right pricing structure to keep their business afloat. Just like price gouging is bad for the economy, competing with cut-rate prices can be equally harmful – especially for small businesses that lack the where-with-all to wait for the provocateurs to go bust.

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