Pay Attention to Trucking

You can't sell something you don't have!

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"A U.S. trucking shortage that has pushed up freight costs for everything from cereal to toothbrushes is about to get worse.

On April 1, police nationwide began enforcing rules requiring most big rigs to use electronic logging devices to record driver hours. While truckers have long been barred from driving more than 11 hours a day (followed by a 10 hour rest period), the new ELDs prevent them from fudging their times on paper logs. That means more trucks are likely to be parked when drivers hit their limits.

“You’re going to be at least tightening the screws a little bit on an already tight marketplace,” Cowen & Co. analyst Jason Seidl said. “If you’re a shipper, it’s not something that’s going to be perceived as friendly.”

The ELD rules add another choke point for freight prices, which already are pinching earnings at companies from Cheerios maker General Mills Inc. to retailer Ross Stores Inc. A driver shortage, surging demand and rough weather already have pushed spot rates up 28% this year through March 23 compared with a year earlier, according to data compiled by Bloomberg."

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"This is surge pricing on a grand scale: The risk is that the economy of “moving stuff” in the U.S. becomes like trying to hail a car from a ride-sharing service after midnight on New Year’s Eve. We end up in a situation with freight demand — everything from companies trying to ship their products to big box stores, to Amazon deliveries, to fast food restaurants awaiting shipments, to homebuilders receiving building materials — far outstripping supply. In such a situation, prices adjust until they go high enough to kill sufficient demand. And some of the accompanying higher freight costs get passed on to consumers, raising inflation and making the Fed more aggressive in hiking rates.

The tragedy of the current economic situation is that a cycle dominated by the promise of a tech-driven automated future may end up cut short by an old-economy problem of too few human drivers."

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Our goal at Madison Wood through "MADWORD" is to communicate information regarding important topics that will ultimately effect buying habits such as trucking. It is crucial for buyers to stay aware of current issues treaters and certainly other industries will face as we approach the heat of the season. As a buyer, you can certainly expect shipping delays for a variety of products (not just treated) and potential freight increases depending on your geographical region.

So how do you get ahead of this potential hiccup when it comes to treated lumber or fence posts? Our advice: Do not wait until the last minute to buy! Even though Madison will be working in overdrive to make sure our operation runs smoothly, just in time inventory is not advised. Start heavily stocking your yard TODAY and beat the Spring rush. Kick off the season prepared, your customers will thank you!

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