For many drivers, all they want to know is where their next load is. That’s fine, but for drivers and fleet operators who aspire to grow their business and earn more money, being able to forecast trends and analyze where demand is going to be coming from is a valuable talent. That’s why understanding how to forecast load-to-truck ratios and fuel prices is a vital skill for truckers.
The best way for drivers to succeed is to treat their trucking career as a business. This means approaching their driving with an eye towards the future, and trying to incorporate industry trends into how they schedule out their loads and make purchases. Fortunately, there are plenty of tools and analysis available to make it easier for people who aren’t necessarily analytics fluent to leverage big data and make more informed decisions.
The first place to start is understanding load-to-truck ratios and how this information can help predict what’s coming soon in terms of loads and prices.
What is load-to-truck ratio?
When shippers (and truckers) want to know what demand will be like in the near future, they look at what is known as the load-to-truck ratio. This is a comparison of the number of current loads that need to be shipped versus the number of drivers that have availability to ship those loads. This is a key industry metric that allows insiders to make plans pertaining to supply chain costs and provides guidance on the direction of price fluctuations, based on the premise that the fewer drivers that are available, the more you will have to pay for a driver.
From a driver’s perspective, this helps to plan future routes, by looking at areas and routes that are likely to have a shortage of drivers. But it’s not hard to see why this would be valuable information for everyone, including fleet managers, shippers, and more.
Where can load-to-truck information be found?
The best place to find information about load-to-truck ratio and other recent data is at the DAT Solutions website. Originally known as Dial-A-Truck, DAT is now a key marketplace where shippers, brokers, and drivers go to conduct transactions on the spot market. This means DAT is in a unique position to understand the current state of the freight market and make predictions about future trends.
DAT offers a host of analytics data, with charts, tables, calendars, and more to make it easy for even novices to digest the information in a meaningful way. In addition, they operate the largest truck freight marketplace in North America, while delivering market data and insights to industry analysts and news organizations. Their database encompasses $110 billion in market transactions. This is why anyone who’s looking to expand their trucking business needs to be familiar with DAT Solutions and everything they have to offer.
Is a high load-to-truck ratio good for drivers?
In general, a higher load-to-truck ratio is a good sign for truck drivers. This indicates that there is a high demand for drivers, with plenty of loads available, and the likelihood of higher pay. At the very least, it should mean that drivers have more loads to choose from.
But by itself, the load-to-truck ratio is just one piece of information. There’s a lot of other data that needs to be analyzed to have greater confidence in making predictions about future rates and so on. For instance, in smaller markets, there will just be fewer loads overall. Comparing the number of loads in and out of Las Angeles to the number of loads in and out of Spokane, Washington doesn’t make much sense.
In such an instance, the load-to-truck ratio will be less of an indicator. In general, loads into smaller markets will offer better rates, since it tends to be harder to get a load coming out. Other useful information in this case would be an analysis of the market over time, to see what the trends are, rather than comparing the current ratio of two very different sized cities.
So while in general, a high load-to-truck ratio is very good for drivers, it is not the only factor that needs to be looked at.
What other data can be found on DAT’s boards?
The DAT website has a lot of great information beyond just the load-to-truck ratio. One important stat that can be found there is concerning spot load posts. Spot loads are transactions that are made at the moment. Comparing this to the number of spot truck posts is how the load-to-truck ratio is calculated. But by itself, knowing the number of spot load posts gives a good gauge of the size of the current market in a particular location, or the overall demand nationally.
DAT also offers breakdowns for individual types of loads. It’s possible to find data on vanloads, flatbed loads, and reefer loads, for example. This is obviously useful for drivers that specialize in or prefer one type of load.
DAT also has plenty of useful charts and tables that provide historical data. This makes it easier to analyze current trends and where the overall or specific markets are headed. Finally, DAT also provides information on fuel prices and how they have changed over time.
How can future gas prices be predicted?
There’s perhaps no other cost consideration that’s more important to truck drivers than fuel prices. Therefore, it’s no surprise that being able to predict future fuel prices would come in handy. But how to do so?
DAT has some of the basic fuel price data featured on their website, but the experts dig much deeper to gain a thorough understanding of what’s happening with fuel markets and how to interpret the data. The basic rule of thumb when it comes to predicting gas prices is to know which overall trends to look at. Another key piece of information is knowing how oil futures contracts work. This is the best way to understand what the future price of raw crude oil is going to be, and takes into account many of the macro factors that impact fuel prices.
Once you’ve gained a general understanding of how gas prices work, you’ll know which factors are most important. For instance, one of the best ways to predict gas prices is to look at the season. Gas prices tend to rise in the spring and summer when more people are driving further distances.
Other factors include the reliability of the supply chain, weather events and natural disasters, competition from alternative energy sources, and any changes in fees, tariffs, or taxes. All of these play a role in how much your gas is going to be at the pump, both today and in the future.
How can truckers utilize future trend information?
If you are an independent trucker, than you might think all of this information doesn’t matter to you. But just because you aren’t paying attention doesn’t mean you aren’t being impacted. How much you can get paid for loads, how easy it is to find loads, and how much you pay in fuel costs all effect what your take home pay is going to be. Who wouldn’t want to take advantage of the fact that you can predict how these factors are going to change over time to make it easier to increase your profits?
For instance, keeping track of the trends regarding the load-to-truck ratio makes it possible for drivers and managers to better select loads so that you have a greater chance of having a lucrative return load waiting for you.
Of course, not everything can be predicted. No one could have foreseen the Covid-19 pandemic. But when it comes to business, every bit of information that helps make better purchasing and logistical decisions means more money in your pocket. That’s why you should work with partners who specialize in utilizing data efficiently and effectively.
Saint John Capital Understands Trucking Industry Trends
While many factoring companies work with companies in all sorts of industry, Saint John Capital has spent nearly 25 years exclusively in support of truckers. That means we are in a unique position to understand the challenges truck drivers face on a daily basis, and help them navigate the various ups and downs of the freight industry. One of the most important things an independent driver or a small business owner can have is the financial stability to be able to maintain and grow their business.
Because of our focus on data and real-world trends, we make it easier for truckers to concentrate on what they do best, deliver freight in a timely manner. Our tailored services, including invoice factoring, fuel cards, a load finder and more, help our clients achieve their financial goals more quickly than would otherwise be possible.
Contact us today to learn more about Saint John Capital.