Inflation pressure cools, but trucking rates keep climbing

As 2019 continues to roll on, the year that was 2018 continues to loom large in the thoughts, statistics, and expectations for 2019. While 2018 was a record year for growth within the trucking industry, it was also a year of volatility regarding the PPI (producer price index) and one that saw inflation thrust to the forefront of the discussion.

In December 2018, price gains were not as excessive as expected due mainly in part to the falling energy prices that fell 5% in the month alone. However, even with falling energy prices, the core PPI did not move during the month and was higher than in December 2017 where it was recorded 2.8% lower than 2018. While the PPI may not seem to be as important an indicator as other factors, it directly correlates to the interest rate increases and increases in inflation that are seemingly expected for 2019.

Even with the core PPI not fluctuating too much, the prices within the trucking industry have continued to rise. Within the last two months of 2018, the producer prices rose almost 2% alone which contributes to the overall year to year inflation rate within the industry to stay around 8%. Most of these gains were also driven by long-distance trucking services while local trucking experienced a decline in the month while keeping steady with the year-to-year numbers.

While the trucking industry’s year that was 2018 will be remembered as one of record growth, lack of capacity and massive regulation changes, the real take away from the year is that inflation was kept down more than years before.  As well, the numbers reflect that 2019 will continue the trend of trucking companies have large amounts of power within the market in regards to determining and setting prices.

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