NEW YORK — Montgomery Transport LLC, an operator of 53-foot flatbed trailers, warned
customers that truck freight rates are headed sharply higher within the next month or so.
Growing demand, soaring fixed costs and the tight availability of chassis and drivers nationwide has
created a “perfect storm” that will drive prices upward by April or May, the Birmingham, Ala.-based
trucking line said. Steel cargoes represent 65 percent of the company’s shipments.
“We are going to be taking a very aggressive approach to all customer contract business and spot
business (with) relatively large increases in the April time frame or May at the latest,” president
Rollins Montgomery told AMM in a March 16 interview.
Flatbed load-to-truck rates already leaped 155 percent between February 2016 and February 2017,
according to DAT RateView, which tracks spot rates.
Montgomery Transport notified customers of the market situation in a letter on March 15. The fourpage
letter includes an array of statistics on fleet failures, insurance rates, regulatory costs,
maintenance expenses, rising tolls and the worsening nationwide shortage of drivers.
Fleet failures more than tripled in 2016, with 4,510 trucks removed from operation in the fourth
quarter, the customer letter said, citing Avondale Partners & Transport Topics. More capacity
reduction is yet to come because of an unwillingness by some carriers to invest in electronic logging
devices, which become federally mandated beginning in December 2017.
“Nobody’s really adding capacity to their fleets,” Rollins Montgomery told AMM. “The customers
who have aligned themselves with reputable carriers will be in a position to be ready.”
He said competitors are offering drivers sign-on bonuses of $5,000 payable over 18 months and
$2,500 bonuses to employees who convince another driver to join the company. The United States
truck driver shortage is estimated at 40,000, the letter said. Average driver age has reached 55.
Montgomery Transport will review all customer accounts in the current pricing evaluation. The
company’s agreements are 90 percent contract, 10 percent spot.
The Alabama trucking line is the nation’s largest operator of 53-foot all-aluminum flatbed trailers
specializing in carrying over-dimensional lengths while also having the capability to scale 50,500
pounds. The company serves 42 states, with 460 trucks. Its logistics division works with an
additional 1,600 contract carriers.
The company president told AMM that he is seeing “an overall uptick” in demand for steel goods
right now, judging from customer shipments.
“Volumes have improved. We really started seeing the improvement in March,” Montgomery said.
“We’re starting to see more structural products running a little more aggressively than they have.”
This content was originally written and produced by Dom Yanchunas at American Metal Market.
