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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Mar 12 – 18 vs.
Mar 5 – 11
Feb 2017 vs.
Jan 2017
Feb 2017 vs.
Feb 2016
Spot Market Loads +8.3% 8.6% +87%
Spot Market Capacity 3.4% +4.7% 1.8%
Van Load-To-Truck +23% 25% +79%
Van Rates (Spot) +0.6% 3.0% +5.9%
Flatbed Load-To-Truck +5.4% +16% +155%
Flatbed Rates (Spot) +0.0% +2.1% +7.1%
Reefer Load-To-Truck +16% 35% +60%
Reefer Rates (Spot) +0.0% 4.6% +3.3%
Fuel Prices 0.6% 0.5% +29%
Van Rates Add 1¢, as Reefers and Flats Hold Steady

Load-to-Truck Ratios Climb

Mar 12 – 18 – A late winter storm stalled freight activity in and out of East Coast markets. The week began with a rush to move freight out ahead of the snowfall. During the storm, there was a lull, and some major roads were closed. By the end of the week, shippers rushed to catch up, at higher rates. Load-to-truck ratios rose for all three equipment types, but only the national average van rate edged up 1¢ per mile. Reefer rates and flatbed rates were unchanged, week over week.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 3/22/2017 – Next update: 3/29/2017

Fuel Prices
-0.8%$2.54 / gallon
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It’s official: The 2013 HOS restart rules are no more.

The 2013 version of the 34-hour restart rule required drivers to be off-duty for two periods from 1AM to 5AM before they could go back to work, and the restart could only be used once per week.

A poll of DAT TruckersEdge readers showed that 73% of them use the 34-hour restart on a weekly basis, so the 1-5AM provision forced a lot of truckers to operate during high-traffic times. That led to a big loss in productivity for most carriers.

Those rules were suspended in December of 2014, but whether or not that suspension was going to be permanent had been a question hanging over the industry ever since.

The FMCSA and Virginia Tech conducted a safety review to determine whether or not to go back to the 2013 version of the restart rules. Ultimately, they found that the 2013 version of the restart rule wasn’t any safer than the version of the rule that everyone is using now, so the current version of the rule is what’s going to stay in place.

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Mar 5 – 11 vs.
Feb 26 – Mar 4
Feb 2017 vs.
Jan 2017
Feb 2017 vs.
Feb 2016
Spot Market Loads +1.3% 8.6% +87%
Spot Market Capacity 0.4% +4.7% 1.8%
Van Load-To-Truck 2.3% 25% +79%
Van Rates (Spot) 1.8% 3.0% +5.9%
Flatbed Load-To-Truck +3.6% +16% +155%
Flatbed Rates (Spot) 0.5% +2.1% +7.1%
Reefer Load-To-Truck +1.2% 35% +60%
Reefer Rates (Spot) 0.5% 4.6% +3.3%
Fuel Prices 0.8% 0.5% +29%
Rates Dip For Vans, Reefers, Flatbeds

Flatbed Load-to-Truck Ratio Still Climbing

Mar 5 – 11 – Load-to-truck ratios increased for reefers and flatbeds last week, with flatbeds continuing a 6-week climb. That, however, did not translate into rate increases. Last week the national average van rate dropped 3¢ per mile, while both reefer rates and flatbed rates slipped 1¢ per mile.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 3/15/2017 – Next update: 3/22/2017

Fuel Prices
-0.8%$2.56 / gallon
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Apply for a Loan

Before you apply for a loan here’s what you should do:

1. Write a Business Plan

Your loan request should be based on and accompanied by a complete business plan. This document is the single most important planning activity that you can perform. A business plan is more than a device for getting financing; it is the vehicle that makes you examine, evaluate, and plan for all aspects of your business. A business plan’s existence proves to your banker that you are doing all the right activities. Once you’ve put the plan together, write a two-page executive summary. You’ll need it if you are asked to send “a quick write-up.”

2. Have an accountant prepare historical financial statements.

You can’t talk about the future without accounting for your past. Internally generated statements are OK, but your bank wants the comfort of knowing an independent expert has verified the information. In addition, you must understand your statement and be able to explain how your operation works and how your finances stand up to industry norms and standards.

3. Line up references.

Your banker may want to talk to your suppliers, customers, potential partners or your team of professionals, among others. When a loan officer asks for permission to contact references, promptly answer with names and numbers; don’t leave him or her waiting for a week.

Walking into a bank and talking to a loan officer will always be something of a stressful situation. Preparation for and thorough understanding of this evaluation process is essential to minimize the stressful variables and optimize your potential to qualify for the funding you seek.

DAT News & Blogs

The number of loads available on the spot market last month was also up more than 100% compared to February 2016, which is a pretty good sign that the freight recession really is over. Rates are still low in some places, but in general, things are trending upward.

Load-to-truck ratios are highest for vans in the darker red areas on the Hot States Map, above.

There were a lot more van loads available out of Chicago and Los Angeles. Even though it wasn’t enough to turn those states dark in the Hot States Map above, don’t be surprised if rates are up out of those places soon. Load counts slipped in Houston, but that market has been relatively strong all winter long. It closed the week strong, too, and the load-to-truck ratio hit 5.6 on Friday, compared to the 2.9 van loads per truck for the rest of the country. Rates got the biggest boosts out of Memphis, Atlanta and Seattle.

All rates below include fuel surcharges and are based on real transactions between brokers and carriers.

RISING

Buffalo has had a lackluster month. Since the freight coming out didn’t pay very well, inbound lanes paid more.

  • Philadelphia to Buffalo was up 18¢ to $2.13/mile
  • Columbus to Buffalo rose 17¢ to $2.57/mile
  • Chicago to Buffalo rates were up 15¢ to an average of $2.17/mile
  • Out West, the lane from Stockton to Denver recovered 13¢ to pay $1.82/mile on average
  • Memphis to Chicago was also up 12¢ at $1.76/mile

FALLING

Only one major van lane was down more than 10¢: Stockton to Salt Lake City dropped ▼18¢ to $1.92/mile

The freight market in L.A. finally started to improve, but that means some inbound lanes paid less. The lane from Chicago to L.A. fell ▼9¢ to just $1.17/mile. That lane competes a lot with rail, which also keeps the rates down.


Load-to-truck ratios are highest for reefers in the darker blue areas on the Hot States Map, above.

REEFER TRENDS

Reefer rates reversed course last week, too, though it was a bit slighter when compared to vans. Still, it’s good news considering the steady string of declines we had been seeing.

RISING

Volumes surged out of Miami. It’s still early for produce season in Florida, as evidenced by the light color in the Hot States Map. Volumes were also up big in McAllen, TX, down near the Mexican border. It was number 3 for reefer load posts on DAT load boards, behind Atlanta (1) and Elizabeth, NJ (2).

  • Usually when there’s an uptick in loads and rates out of Miami, it means that the inbound rate goes down — that wasn’t the case last week on the lane from Atlanta to Miami, which was up ▲15¢ to $2.58/mile
  • Dallas to Columbus was up ▲21¢ to $1.70/mile

The biggest spikes were on lanes out of Grand Rapids, but there aren’t a lot of loads on those lanes this time of year.

  • Grand Rapids to Cleveland jumped up ▲50¢ to $3.34/mile
  • Grand Rapids to Philly rose ▲38¢ to $2.88/mile

FALLING

California was still missing in action, and outbound rates slipped even lower out of Los Angeles. Recent rains have delayed strawberry harvests in much of the state, so those shipments are still a few weeks away.

Out East, two lanes out of Northern New Jersey took a hit last week

  • Elizabeth, NJ, to Boston fell ▼15¢ to $3.40/mile
  • Elizabeth to Lakeland, FL was down ▼12¢ to $1.71/mile


Load-to-truck ratios are highest for flatbeds in the darker green areas on the Hot States Map, above.

FLATBED TRENDS

Demand for flatbed trucks continued to climb ahead of where it normally is for this time of year. Even California joined the party last week, with higher than normal activity.

RISING

Rates improved almost everywhere, and port cities that had been down the week before rebounded last week. The biggest gains were in Atlanta, Memphis, and Baltimore.

  • Memphis to Dallas was up ▲39¢ to $2.74/mile, with a nice boost in volumes
  • Atlanta to Nashville also climbed ▲35¢ to $2.58/mile

FALLING

Pittsburgh rates and volumes didn’t hold after seeing a spike in the previous week.

  • The number of loads heading from Pittsburgh to Houston was down sharply, and rates came crashing back to earth at an average of $1.67/mile
  • Phoenix and Las Vegas volumes have been low, which is indicative of statewide trends in Arizona, Nevada, and New Mexico.
  • Cleveland has also been a little softer than other major flatbed markets this winter
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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Feb 26 – Mar 4 vs.
Feb 19 – 25
Feb 2017 vs.
Jan 2017
Feb 2017 vs.
Feb 2016
Spot Market Loads +17% 8.6% +87%
Spot Market Capacity 3.9% +4.7% 1.8%
Van Load-To-Truck +25% 25% +79%
Van Rates (Spot) +2.5% 3.0% +5.9%
Flatbed Load-To-Truck +19% +16% +155%
Flatbed Rates (Spot) +3.1% +2.1% +7.1%
Reefer Load-To-Truck +30% 35% +60%
Reefer Rates (Spot) +0.5% 4.6% +3.3%
Fuel Prices +0.0% 0.5% +29%
Rates Rise, and Load Counts Keep Climbing

Load-to-Truck Ratios Increase Sharply

Feb 26 – Mar 4 – Spot market demand has been building, and last week that led to rate increases for each equipment type. The national average van rate increased 4¢ per mile, reefer rates added 1¢, and flatbed rates jumped 6¢. Load-to-truck ratios were also up sharply for each trailer type.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 3/8/2017 – Next update: 3/15/2017

Fuel Prices
+0.0%$2.58 / gallon
Trucking Success partners with DAT to offer a special on the TruckersEdge load board. Sign up for TruckersEdge today and get your first 30 days free by signing up at http://www.truckersedge.net/promo123 or entering “promo123” during sign up.

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Feb 19 – 25 vs.
Feb 12 – 18
Jan 2017 vs.
Dec 2016
Jan 2017 vs.
Jan 2016
Spot Market Loads +1.5% +0.6% +100%
Spot Market Capacity +1.1% +5.2% +5.2%
Van Load-To-Truck 6.6% 13% +76%
Van Rates (Spot) +0.0% 2.9% +1.2%
Flatbed Load-To-Truck +8.0% +14% +164%
Flatbed Rates (Spot) +0.0% 2.6% +1.6%
Reefer Load-To-Truck 5.5% 10% +62%
Reefer Rates (Spot) 0.5% 1.5% +3.2%
Fuel Prices +0.4% +2.8% +20%
Flatbed Freight Remains Strong for February

Ratios Slip for Vans and Reefers

Feb 19 – 25 – Flatbed freight demand continued to climb last week, with load-to-truck ratios rising 8%. Meanwhile, the late February lull for vans and reefers led to lower ratios, with the national average reefer rate down another 1¢, The national averages for van and flatbed rates were unchanged compared to the previous week.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 3/1/2017 – Next update: 3/8/2017

Fuel Prices
+0.4%$2.58 / gallon
Trucking Success partners with DAT to offer a special on the TruckersEdge load board. Sign up for TruckersEdge today and get your first 30 days free by signing up at http://www.truckersedge.net/promo123 or entering “promo123” during sign up.

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Feb 12 – 18 vs.
Feb 5 – 11
Jan 2017 vs.
Dec 2016
Jan 2017 vs.
Jan 2016
Spot Market Loads +4.0% +0.6% +100%
Spot Market Capacity 1.2% +5.2% +5.2%
Van Load-To-Truck +4.1% 13% +76%
Van Rates (Spot) 0.6% 2.9% +1.2%
Flatbed Load-To-Truck +9.1% +14% +164%
Flatbed Rates (Spot) +0.0% 2.6% +1.6%
Reefer Load-To-Truck 0.1% 10% +62%
Reefer Rates (Spot) 0.5% 1.5% +3.2%
Fuel Prices +0.4% +2.8% +20%
Van and Reefer Rates Dip 1¢

National Flatbed Rate Holds Steady

Feb 12 – 18 – Spot market volumes have stabilized as of late. Load-to-truck ratios were up for each trailer type last week, though it’s not yet enough to put pressure on rates. The national average for van and reefer rates dipped another 1¢, but the national flatbed rate held steady.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 2/22/2017 – Next update: 3/01/2017

Fuel Prices
+0.4%$2.57 / gallon
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Getloaded has been consolidated into DAT to create one gigantic super database.

More carriers to choose from

The consolidation of Getloaded carriers, plus DAT’s own growth, has resulted in a 36 percent increase in the number of carriers accessing DAT load boards compared to a year ago. The consolidation also diversifies DAT’s carrier base, as Getloaded has had a significant number of carriers moving flatbed and specialty freight, as well as hot shot and LTL loads.

Since 2015, DAT has doubled its carrier database to over 18,000 carriers with capacity exceeding 1.3 million trucks, by far the largest available capacity in the industry.

DAT and Getloaded are owned by the same parent company, but until recently the two have operated with independent databases. That meant that loads and trucks posted on one network were not seen on the other one. Getloaded customers have been transferred to the DAT platform, and the Getloaded platform has been retired.

Bigger is Better

Need a load board upgrade?

Learn more about DAT Power, DAT’s fastest and most advanced load board.

“In this case, bigger really is better. On the spot market, brokers want to connect with as many quality trucks that can deliver freight on a lane,” said Don Thornton, Senior Vice President at DAT.

It’s Mobile Too

All customers will benefit from DAT’s new mobile app, DAT Load Board for Truckers. It allows carriers to use their smartphones and tablets to find the same loads that they would using the desktop version of the load board. That’s a plus for brokers too, as they can reach carriers while they’re out on the road and looking for their next load.  The Android version is currently available in Google Play, and the iOS version is scheduled for early Spring.

Trucking Success partners with DAT to offer a special on the TruckersEdge load board. Sign up for TruckersEdge today and get your first 30 days free by signing up at http://www.truckersedge.net/promo123 or entering “promo123” during sign up.

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Feb 5 – 11 vs.
Jan 29 – Feb 4
Jan 2017 vs.
Dec 2016
Jan 2017 vs.
Jan 2016
Spot Market Loads +1.7% +0.6% +100%
Spot Market Capacity +3.2% +5.2% +5.2%
Van Load-To-Truck 8.6% 13% +76%
Van Rates (Spot) 1.8% 2.9% +1.2%
Flatbed Load-To-Truck +13% +14% +164%
Flatbed Rates (Spot) +2.1% 2.6% +1.6%
Reefer Load-To-Truck 11% 10% +62%
Reefer Rates (Spot) 1.0% 1.5% +3.2%
Fuel Prices 0.2% +2.8% +20%
Van and Reefer Rates Continue to Slide

National Flatbed Rate Adds 4¢

Feb 5 – 11 – Van and reefer rates continued to decline, which is typical for what’s normally a slow month for freight, but spot market volumes last week were strong for this time of year. The national flatbed rate rose 4¢ per mile last week.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 2/15/2017 – Next update: 2/22/2017

Fuel Prices
+0.0%$2.56 / gallon
Trucking Success partners with DAT to offer a special on the TruckersEdge load board. Sign up for TruckersEdge today and get your first 30 days free by signing up at http://www.truckersedge.net/promo123 or entering “promo123” during sign up.

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Jan 29 – Feb 4 vs.
Jan 22 – 28
Jan 2017 vs.
Dec 2016
Jan 2017 vs.
Jan 2016
Spot Market Loads +7.7% +0.6% +100%
Spot Market Capacity 2.1% +5.2% +5.2%
Van Load-To-Truck +2.9% 13% +76%
Van Rates (Spot) 1.8% 2.9% +1.2%
Flatbed Load-To-Truck +21% +14% +164%
Flatbed Rates (Spot) +0.5% 2.6% +1.6%
Reefer Load-To-Truck 1.9% 10% +62%
Reefer Rates (Spot) 3.0% 1.5% +3.2%
Fuel Prices +0.0% +2.8% +20%
Van and Reefer Rates Fall in Slow Season
 

National Flatbed Rate Adds 1¢

Jan 29 – Feb 4 – There was an uptick in spot market volumes last week, which followed a couple weeks of declining load posts. Van and reefer rates continued to decline during the slow season, but the national averages for each trailer type remain higher than they were in February 2016. The national flatbed rate rose 1¢ per mile.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 2/8/2017 – Next update: 2/15/2017

Fuel Prices
+0.0%$2.56 / gallon
Trucking Success partners with DAT to offer a special on the TruckersEdge load board. Sign up for TruckersEdge today and get your first 30 days free by signing up at http://www.truckersedge.net/promo123 or entering “promo123” during sign up.

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Jan 22 – 28 vs.
Jan 15 – 21
Dec 2016 vs.
Nov 2016
Dec 2016 vs.
Dec 2015
Spot Market Loads 12% +13% +84%
Spot Market Capacity +4.8% 9.6% 3.9%
Van Load-To-Truck 13% +22% +80%
Van Rates (Spot) 0.6% +4.2% +0.6%
Flatbed Load-To-Truck 17% +35% +167%
Flatbed Rates (Spot) +0.5% +2.6% +0.5%
Reefer Load-To-Truck 20% +21% +66%
Reefer Rates (Spot) 0.5% +1.0% +1.0%
Fuel Prices 0.4% +2.9% +8.7%
Rates Decline Seasonally for Vans and Reefers

Volumes Strong Compared to Last Year

Jan 22 – 28 – Demand continued to decline seasonally, but spot market volumes haven’t fallen off sharply in January like they did around this same time a year ago. Van and reefer rates each fell an average of 1¢ per mile, while the national average flatbed rate rose by 1¢.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 2/01/2017 – Next update: 2/8/2017

Fuel Prices
-0.4%$2.56 / gallon
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Plus, getting your motor carrier authority can take a month or more, so by the time you get your DOT number and start your business, you’ll be ready for the spring freight season.

Remember: It takes a month if you don’t hit any delays along the way, but it could take longer. For example, if you needed to change your company name, or something comes up in the registration process, the FMCSA could take extra time before approving your authority. That’s why it’s crucial that you do your research before making the leap.

That goes for both regulations AND your business strategies. Insurance, registration fees, equipment, staffing, taxes – all these expenses are your responsibility once you get your own authority. The risks are high, but so are the potential rewards.

Ready to take the plunge? Here are 9 steps to starting your own trucking business.

  1. Get your commercial driver’s license – Get behind the wheel and get some experience
  2. Make a business plan – What are you hauling? Who are your customers?
  3. Choose a business structure – Choices include LLC, corporation, partnership, sole proprietorship, etc.
  4. Start-up expensesGet authority and save money to cover the first few months until you start getting paid
  5. Plan your operations – Staffing, parking, maintenance, back office – who does what?
  6. Safety compliance – State and federal regulations
  7. Insurance – $750,000 minimum liability
  8. Equipment – What tractor and/or trailer does your business need?
  9. Grow your business –Find loads

Want to get started as quickly as possible? Give us a call at 866-812-3379, and we can take care of the paperwork for you. That way you don’t have to worry about making a mistake that leads to you missing out on the busy season later this year.

You can also send us a message here to get started with your authority or anything else you need to keep your trucking business compliant.

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Jan 15 – 21 vs.
Jan 8 – 14
Dec 2016 vs.
Nov 2016
Dec 2016 vs.
Dec 2015
Spot Market Loads 14% +13% +84%
Spot Market Capacity +13% 9.6% 3.9%
Van Load-To-Truck 26% +22% +80%
Van Rates (Spot) 1.2% +4.2% +0.6%
Flatbed Load-To-Truck 20% +35% +167%
Flatbed Rates (Spot) +0.5% +2.6% +0.5%
Reefer Load-To-Truck 27% +21% +66%
Reefer Rates (Spot) 1.0% +1.0% +1.0%
Fuel Prices 0.4% +2.9% +8.7%
Demand Slows in Mid-January

Prices Dip for Vans and Reefers

Jan 15 – 21 – It’s typical for load counts to start tapering off in the third week of January, which is what happened last week. Load-to-truck ratios declined for all equipment types, but they also started out higher than normal for this time of year. National average rates fell 2¢ for both vans and reefers, but were up slightly for flatbeds.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 1/25/2017 – Next update: 2/01/2017

Fuel Prices
-0.4%$2.57 / gallon
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1. Strong demand

The biggest factor affecting capacity is, of course, the volume of freight that brokers are asked to move and the number of available, qualified trucks to move it. And although demand started out weak at the beginning of 2016, it sure did not end the year that way. Beginning in mid-2016, there began a steady climb in the load-to-truck ratios for vans, reefers and flatbeds. These ratios represent the number of loads posted for every truck posted on DAT Load Boards, and are an indicator of spot market demand relative to capacity.

The December DAT Freight Index revealed that spot market demand increased for six straight months in the latter half of 2016. Comparing December 2015 to December 2016, van freight availability increased 52 percent, reefer demand was up 55 percent, and demand for flatbeds increased 48 percent.

(More info: Spot Market Demand Increases for Sixth Straight Month and 2017 Outlook: The Freight Recession is Over.)

Beginning in May 2016, there began a steady climb in the load-to-truck ratios for vans. Reefers experienced a similar pattern, and flatbeds began their climb in August.

2. ELD Mandate

The ELD mandate is now less than one year away. That means that after December 17, 2017, all heavy-duty trucks (with a few exceptions) must use electronic logging devices (ELDs) to log their hours of service. While large carriers have been using ELDs for years, many small fleets and owner-operators have yet to make the switch from paper logs.

Industry predictions about the reduction of capacity following the mandate vary from 3-5 percent, to 6-10 percent. In our recent blog post Brokers Concerned About ELDs Too, one broker noted that fewer than half of his carriers currently use ELDs. Another said he intends to poll his core carriers to see how many have implemented ELDs—and update the figures monthly throughout 2017. 

3. Increased scrutiny of drivers

In a time when truck drivers are already hard to find and retain, there are a number of new regulations under consideration by the FMCSA that could further chip away at the number of drivers. There are proposals to test drivers for sleep apnea, use hair testing to check for drug use, and to create a database of drivers who have failed a drug or alcohol test.

In addition, the FMCSA recently completed public comment on a speed limiter rule that could force drivers to drive slower than the posted speed limit in certain states. A reduction of even a few miles per hour, multiplied by the thousands of miles a driver logs each year, would be yet another hit to productivity.

4. Rising fuel prices

Diesel prices have risen 59 cents per gallon since February, and analysts are predicting prices to continue to rise in 2017. The Organization of Petroleum Exporting Countries (OPEC) announced that they plan to cut production this year and, at current prices, there’s not much incentive to increase U.S. oil production.

For carriers, the cost of fuel is their second-highest expense, behind personnel costs. When fuel prices rose sharply in 2008, the number of carrier bankruptcies also spiked. Fleets and owner-operators who have hobbled along financially while prices have been low, could be pushed over the edge if fuel prices rise significantly.

 

National average diesel prices have climbed 59 cents per gallon since February, as seen in this graph from DAT RateView.

5. Infrastructure concerns

As traffic congestion increases, productivity decreases. Highway funding bills have hit roadblocks in congress and are often short-term measures that maintain spending at current levels. Although the incoming Trump administration has proposed big increases in infrastructure spending, it’s unclear whether Congress will support the new president’s aspirations.

Underfunded infrastructure exaggerates other trucking problems, such as the lack of parking for truck drivers to take their mandated breaks. This problem will only get worse with the ELD mandate, as electronic logs won’t allow any wiggle room when drivers needs to take their required rest breaks or stop for the night.

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Industry Trends WEEK MONTH YEAR
Jan 8 – 14 vs.
Jan 1 – 7
Dec 2016 vs.
Nov 2016
Dec 2016 vs.
Dec 2015
Spot Market Loads +18% +13% +84%
Spot Market Capacity +34% 9.6% 3.9%
Van Load-To-Truck 16% +22% +80%
Van Rates (Spot) 2.8% +4.2% +0.6%
Flatbed Load-To-Truck 5.3% +35% +167%
Flatbed Rates (Spot) 1.6% +2.6% +0.5%
Reefer Load-To-Truck 15% +21% +66%
Reefer Rates (Spot) 1.5% +1.0% +1.0%
Fuel Prices +0.4% +2.9% +8.7%
Load-to-Truck Ratios Retreat

Prices Dip for Vans, Flats and Reefers

Jan 8 – 14 –Load board activity increased, but load-to-truck ratios declined in the first full work week of the new year. Rates fell for vans, reefers and flatbeds. Severe weather also affected freight movement in many parts of the country.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 1/17/2017 – Next update: 1/25/2017

Fuel Prices
-0.4%$2.59 / gallon
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Tax Tips 2017

Tax Changes for 2017: A Checklist

 Welcome, 2017! As the New Year rolls around, it’s always a sure bet that there will be changes to current tax law and 2017 is no different. From health savings accounts to tax rate schedules and standard deductions, here’s a checklist of tax changes to help you plan the year ahead.

Individuals

For 2017, more than 50 tax provisions are affected by inflation adjustments, including personal exemptions, AMT exemption amounts, and foreign earned income exclusion.

While the tax rate structure, which ranges from 10 to 39.6 percent, remains the same as in 2016, tax-bracket thresholds increase for each filing status. Standard deductions and the personal exemption have also been adjusted upward to reflect inflation. For details see the article, “Tax Brackets, Deductions, and Exemptions for 2017,” below.

Alternative Minimum Tax (AMT)
Exemption amounts for the AMT, which was made permanent by the American Taxpayer Relief Act (ATRA) are indexed for inflation and allow the use of nonrefundable personal credits against the AMT. For 2017, the exemption amounts are $54,300 for individuals ($53,900 in 2016) and $84,500 for married couples filing jointly ($83,800 in 2016).

“Kiddie Tax”
For taxable years beginning in 2017, the amount that can be used to reduce the net unearned income reported on the child’s return that is subject to the “kiddie tax,” is $1,050 (same as 2016). The same $1,050 amount is used to determine whether a parent may elect to include a child’s gross income in the parent’s gross income and to calculate the “kiddie tax.” For example, one of the requirements for the parental election is that a child’s gross income for 2017 must be more than $1,050 but less than $10,500.

For 2017, the net unearned income for a child under the age of 19 (or a full-time student under the age of 24) that is not subject to “kiddie tax” is $2,100.

Health Savings Accounts (HSAs)
Contributions to a Health Savings Account (HSA) are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent. Medical expenses must not be reimbursable by insurance or other sources and do not qualify for the medical expense deduction on a federal income tax return.

A qualified individual must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance with the exception of insurance for accidents, disability, dental care, vision care, or long-term care.

For calendar year 2017, a qualifying HDHP must have a deductible of at least $1,300 for self-only coverage or $2,600 for family coverage and must limit annual out-of-pocket expenses of the beneficiary to $6,550 for self-only coverage and $13,100 for family coverage.

Medical Savings Accounts (MSAs)
There are two types of Medical Savings Accounts (MSAs): the Archer MSA created to help self-employed individuals and employees of certain small employers, and the Medicare Advantage MSA, which is also an Archer MSA, and is designated by Medicare to be used solely to pay the qualified medical expenses of the account holder. To be eligible for a Medicare Advantage MSA, you must be enrolled in Medicare. Both MSAs require that you are enrolled in a high-deductible health plan (HDHP).

Self-only coverage. For taxable years beginning in 2017, the term “high deductible health plan” means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,250 and not more than $3,350 (same as 2016), and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,500 (up $50 from 2016).Family coverage. For taxable years beginning in 2017, the term “high deductible health plan” means, for family coverage, a health plan that has an annual deductible that is not less than $4,500 and not more than $6,750 (up $50 from 2016), and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $8,250 (up $100 from 2016).

Penalty for not Maintaining Minimum Essential Health Coverage
For calendar year 2017, the dollar amount used to determine the penalty for not maintaining minimum essential health coverage is $695.

AGI Limit for Deductible Medical Expenses
In 2017, the deduction threshold for deductible medical expenses remains at 10 percent (same as 2016) of adjusted gross income (AGI). Prior to January 1, 2017, if either you or your spouse were age 65 or older as of December 31, 2016, the 7.5 percent threshold that was in place in earlier tax years continued to apply. That provision expired at the end of 2016, however, and starting in 2017, the 10 percent of AGI threshold applies to everyone.

Eligible Long-Term Care Premiums
Premiums for long-term care are treated the same as health care premiums and are deductible on your taxes subject to certain limitations. For individuals age 40 or younger at the end of 2017, the limitation is $410. Persons more than 40 but not more than 50 can deduct $770. Those more than 50 but not more than 60 can deduct $1,530 while individuals more than 60 but not more than 70 can deduct $4,090. The maximum deduction is $5,110 and applies to anyone more than 70 years of age.

Medicare Taxes
The additional 0.9 percent Medicare tax on wages above $200,000 for individuals ($250,000 married filing jointly), which went into effect in 2013, remains in effect for 2017, as does the Medicare tax of 3.8 percent on investment (unearned) income for single taxpayers with modified adjusted gross income (AGI) more than $200,000 ($250,000 joint filers). Investment income includes dividends, interest, rents, royalties, gains from the disposition of property, and certain passive activity income. Estates, trusts, and self-employed individuals are all liable for the new tax.

Foreign Earned Income Exclusion
For 2017, the foreign earned income exclusion amount is $102,100, up from $101,300 in 2016.

Long-Term Capital Gains and Dividends
In 2017 tax rates on capital gains and dividends remain the same as 2016 rates; however threshold amounts are indexed for inflation. As such, for taxpayers in the lower tax brackets (10 and 15 percent), the rate remains 0 percent. For taxpayers in the four middle tax brackets, 25, 28, 33, and 35 percent, the rate is 15 percent. For an individual taxpayer in the highest tax bracket, 39.6 percent, whose income is at or above $418,400 ($470,700 married filing jointly), the rate for both capital gains and dividends is capped at 20 percent.

Pease and PEP (Personal Exemption Phaseout)
Both Pease (limitations on itemized deductions) and PEP (personal exemption phase-out) have been permanently extended (and indexed to inflation) for taxable years beginning after December 31, 2012, and in 2017, affect taxpayers with income at or above $261,500 for single filers and $313,800 for married filing jointly.

Estate and Gift Taxes
For an estate of any decedent during calendar year 2017, the basic exclusion amount is $5,490,000, indexed for inflation (up from $5,450,000 in 2016). The maximum tax rate remains at 40 percent. The annual exclusion for gifts remains at $14,000.

Ensuring Financial Success for Your Business

 Can you point your company in the direction of financial success, step on the gas, and then sit back and wait to arrive at your destination?

Not quite. You can’t let your business run on autopilot and expect good results. Any business owner knows you need to make numerous adjustments along the way – decisions about pricing, hiring, investments, and so on.

So, how do you handle the array of questions facing you?

One way is through cost accounting.

Cost Accounting Helps You Make Informed Decisions

Cost accounting reports and determines the various costs associated with running your business. With cost accounting, you track the cost of all your business functions – raw materials, labor, inventory, and overhead, among others.

Note: Cost accounting differs from financial accounting because it’s only used internally, for decision making. Because financial accounting is employed to produce financial statements for external stakeholders, such as stockholders and the media, it must comply with generally accepted accounting principles (GAAP). Cost accounting does not.

Cost accounting allows you to understand the following:

  1. Cost behavior. For example, will the costs increase or stay the same if production of your product goes up?
  2. Appropriate prices for your goods or services. Once you understand cost behavior, you can tweak your pricing based on the current market.
  3. Budgeting. You can’t create an effective budget if you don’t know the real costs of the line items.

Is It Hard?

To monitor your company’s costs with this method, you need to pay attention to the two types of costs in any business: fixed and variable.

Fixed costs don’t fluctuate with changes in production or sales. They include:

  • rent
  • insurance
  • dues and subscriptions
  • equipment leases
  • payments on loans
  • management salaries
  • advertising

Variable costs DO change with variations in production and sales. Variable costs include:

  • raw materials
  • hourly wages and commissions
  • utilities
  • inventory
  • office supplies
  • packaging, mailing, and shipping costs

Tip: Cost accounting is easier for smaller, less complicated businesses. The more complex your business model, the harder it becomes to assign proper values to all the facets of your company’s functioning.

If you’d like to understand the ins and outs of your business better and create sound guidance for internal decision making, consider setting up a cost accounting system.

Need Help?

Please call if you need assistance setting up cost accounting and inventory systems, preparing budgets, cash flow management or any other matter related to ensuring the financial success of your business.

 

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Jan 1 – 7 vs.
Dec 25 – 31
Dec 2016 vs.
Nov 2016
Dec 2016 vs.
Dec 2015
Spot Market Loads +17% +13% +84%
Spot Market Capacity +9.5% 9.6% 3.9%
Van Load-To-Truck +9.8% +22% +80%
Van Rates (Spot) +2.3% +4.2% +0.6%
Flatbed Load-To-Truck +6.8% +35% +167%
Flatbed Rates (Spot) 1.5% +2.6% +0.5%
Reefer Load-To-Truck 4.3% +21% +66%
Reefer Rates (Spot) +2.5% +1.0% +1.0%
Fuel Prices +0.4% +2.9% +8.7%
High Load-to-Truck Ratios Kick Off 2017

Demand Stays Strong in New Year

Jan 1 – 7 – Higher volumes and fuel prices led to higher national averages for van rates and reefer rates, though the national flatbed rates declined, compared to the average for December. Prices fell in most major markets, when compared to the highs of the previous week.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 1/10/2017 – Next update: 1/17/2017

Fuel Prices
+0.4%$2.60 / gallon
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While the mandate has the potential to force some small carriers out of business — possibly leading to higher freight rates, if capacity tightens — there are several other proposed rules and regulations could also have major impacts on the trucking industry in 2017.

Here are 5 new regulations that could affect truckers and carriers the most.

ELD Mandate

Any truck driver who’s required to track Hours of Service must do so with an electronic logging device (ELD) by December 16. Some shippers may require the carriers they work with to make the change earlier than that. (Note: Drivers of vehicles manufactured before 2000 are exempt from the mandate.)
More info

Hours of Service

Some portions of the HOS rules that were introduced in July 2013 were lifted again in 2014. The 2013 rules required 34-hour restarts to include two stretches between 1:00 AM and 5:00 AM, and the restart could be used only once per seven days. Those provisions were suspended, and a study by the FMCSA and Virginia Tech University on the rules’ safety impact will determine whether or not that suspension is permanent. According to Overdrive Online, the report is “under departmental review.”
More info

MC Numbers

The Unified Registration System (URS) was scheduled to be fully implemented by January 14, but the FMCSA announced that it’s been delayed. Again. We should learn the new date sometime soon. Once it’s in place, the URS will replace the FMCSA’s old registration system for operating authority, and going forward, all carriers, brokers, and freight forwarders will be identified solely by a DOT number instead of an MC, FF, or MX number.
More info

Speed Limiters

The public comment period closed last month on a proposed rule that would require speed limiters on vehicles that weigh more than 26,000 lbs. The FMCSA hasn’t suggested what the top speed on the limiters would be. A large segment of those who participated in the public comment period argued against speed limiters, although some large carriers supported a 65 mph limit.
More info

Overtime Pay

New overtime rules were set to take effect last month, but a lawsuit filed in October by 21 states put the rules on hold. Current law says that any salaried employee making more than $23,660 per year is exempt from overtime pay. The new rules, if implemented, would push that limit up to $47,476 per year. It also would allow for 10% of commission or bonus pay to be counted toward the employee’s total compensation, but only if paid at least quarterly. Most drivers are paid by the mile, but dispatchers, salespeople, and other salaried employees could be affected.
More info

Need helping keeping your trucking company compliant with the new rules? Contact our Fleet Services team.

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Dec 25 – 31 vs.
Dec 18 – 24
Dec 2016 vs.
Nov 2016
Dec 2016 vs.
Dec 2015
Spot Market Loads 17% +13% +84%
Spot Market Capacity 29% 9.6% 3.9%
Van Load-To-Truck +9.4% +22% +80%
Van Rates (Spot) +1.2% +4.2% +0.6%
Flatbed Load-To-Truck +27% +35% +167%
Flatbed Rates (Spot) +0.5% +2.6% +0.5%
Reefer Load-To-Truck +19% +21% +66%
Reefer Rates (Spot) +1.0% +1.0% +1.0%
Fuel Prices +1.9% +2.9% +8.7%
Load-to-Truck Ratios Soar, Heading Into Holiday

Rates Rise Ahead of Christmas

Dec 25 – 31 – Spot market freight rates soared between Christmas and New Year’s Day. A combination of tighter capacity and urgency to move freight before the end of 2016 led to some of the highest prices of the year, while load-to-truck ratios surged. The national averages for both reefer and flatbed rates were up 2¢, while van rates added 1¢.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 1/3/2017 – Next update: 1/10/2017

Fuel Prices
+1.9%$2.59 / gallon
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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Dec 18 – 24 vs.
Dec 11 – 17
Nov 2016 vs.
Oct 2016
Nov 2016 vs.
Nov 2015
Spot Market Loads +1.2% +4.6% +87%
Spot Market Capacity 11% 3.3% +5.1%
Van Load-To-Truck +9.5% +9.7% +74%
Van Rates (Spot) +0.6% +1.2% 2.3%
Flatbed Load-To-Truck +15% +3.1% +124%
Flatbed Rates (Spot) +1.0% 1.0% 3.6%
Reefer Load-To-Truck +28% +15% +60%
Reefer Rates (Spot) +1.0% +3.2% +0.5%
Fuel Prices +0.4% 0.6% 1.2%
Load-to-Truck Ratios Soar, Heading Into Holiday

Rates Rise Ahead of Christmas

Dec 18 – 24 – It cost a little more to move freight as we got closer to Christmas. Even as activity tapered off near the end of the week, urgency rose, which led to higher rates. Van rates  were up 1¢ nationally, while reefer and flatbed rates were each 2¢ higher than they were the previous week.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 12/27/2016 – Next update: 1/3/2017

Fuel Prices
+0.4%$2.54 / gallon
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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Dec 11 – 17 vs.
Dec 4 – 10
Nov 2016 vs.
Oct 2016
Nov 2016 vs.
Nov 2015
Spot Market Loads +1.6% +4.6% +87%
Spot Market Capacity 5.3% 3.3% +5.1%
Van Load-To-Truck +4.5% +9.7% +74%
Van Rates (Spot) 1.7% +1.2% 2.3%
Flatbed Load-To-Truck +3.1% +3.1% +124%
Flatbed Rates (Spot) +0.0% 1.0% 3.6%
Reefer Load-To-Truck +21% +15% +60%
Reefer Rates (Spot) 0.5% +3.2% +0.5%
Fuel Prices +0.5% 0.6% 1.2%
Load-to-Truck Ratios Regain Momentum

Rates Dip, But Stay Strong

Dec 11 – 17 – Load-to-truck ratios were already strong, but they went even higher last week, for all equipment types. Van rates dipped 3¢ compared to the previous week, but remain strong for the season. In fact, December is on track to be the peak month for van pricing in 2016. Reefer rates lost 1¢ per mile, and flatbeds were unchanged, week over week.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 12/20/2016 – Next update: 12/27/2016

Fuel Prices
+1.6%$2.53 / gallon
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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Dec 4 – 10 vs.
Nov 27 – Dec 3
Nov 2016 vs.
Oct 2016
Nov 2016 vs.
Nov 2015
Spot Market Loads 8.6% +4.6% +87%
Spot Market Capacity +15% 3.3% +5.1%
Van Load-To-Truck 28% +9.7% +74%
Van Rates (Spot) 0.6% +1.2% 2.3%
Flatbed Load-To-Truck 5.6% +3.1% +124%
Flatbed Rates (Spot) +0.5% 1.0% 3.6%
Reefer Load-To-Truck 26% +15% +60%
Reefer Rates (Spot) 0.5% +3.2% +0.5%
Fuel Prices +0.4% 0.6% 1.2%
December Freight Stays Strong

Rates Dip 1¢ for Vans and Reefers

Dec 4 – 10 – Load availability edged down last week after a big spike the week before. Load-to-truck ratios declined for all trailer types, but all remain higher than usual for this time of the year. Van rates dipped 1¢ from the previous week’s high, and reefers also lost 1¢ per mile, but flatbed rates rose 1¢.

The chart above depicts national average spot market rates for the past four weeks, including fuel surcharges. Weekly rate snapshots reflect averages for the month to-date, from DAT RateView.

Last update: 12/13/2016 – Next update: 12/20/2016

Fuel Prices
+0.4%$2.49 / gallon
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2016 Recap: Tax Provisions for Businesses

Whether you file as a corporation or sole proprietor here’s what business owners need to know about tax changes for 2016.

Standard Mileage Rates
The standard mileage rates in 2016 are as follows: 54 cents per business mile driven, 19 cents per mile driven for medical or moving purposes, and 14 cents per mile driven in service of charitable organizations.

Health Care Tax Credit for Small Businesses
Small business employers who pay at least half the premiums for single health insurance coverage for their employees may be eligible for the Small Business Health Care Tax Credit as long as they employ fewer than the equivalent of 25 full-time workers and average annual wages do not exceed $52,000 (adjusted annually for inflation) in 2016.

In 2016 (as in 2015 and 2014), the tax credit is worth up to 50 percent of your contribution toward employees’ premium costs (up to 35 percent for tax-exempt employers). For tax years 2010 through 2013, the maximum credit was 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities.

Section 179 Expensing and Depreciation

The Section 179 expense deduction was made permanent at $500,000 by the Protecting Americans from Tax Hikes Act of 2015 (PATH). For equipment purchases, the maximum deduction is $500,000 of the first $2.01 million of qualifying equipment placed in service during the current tax year. The deduction is phased out dollar for dollar on amounts exceeding the $2 million threshold amount (indexed for inflation) and eliminated above amounts exceeding $2.5 million. In addition, Section 179 is now indexed to inflation in increments of $10,000 for future tax years.

The 50 percent bonus depreciation has been extended through 2019. Businesses are able to depreciate 50 percent of the cost of equipment acquired and placed in service during 2015, 2016 and 2017. However, the bonus depreciation is reduced to 40 percent in 2018 and 30 percent in 2019. The standard business depreciation amount is 24 cents per mile.

Please call if you have any questions about Section 179 expensing and the bonus depreciation.

Work Opportunity Tax Credit (WOTC)

Extended through 2019, the Work Opportunity Tax Credit has been modified and enhanced for employers who hire long-term unemployed individuals (unemployed for 27 weeks or more) and is generally equal to 40 percent of the first $6,000 of wages paid to a new hire. Please call if you have any questions about the Work Opportunity Tax Credit.

SIMPLE IRA Plan Contributions
Contribution limits for SIMPLE IRA plans increased to $12,500 for persons under age 50 and $15,500 for persons age 50 or older in 2016. The maximum compensation used to determine contributions increases to $265,000.

Please contact the office if you need help understanding which deductions and tax credits you are entitled to.

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The Android app is included with your DAT Power, Express, TruckersEdge, or MembersEdge account. It gives you access to all the same loads you find with your current load board subscription, but now you get the most advanced tools for owner-operators, carriers, and dispatchers all on your smartphone. Just download the app from the Google Play Store, log in with the same info you use for your DAT subscription, and search for loads from the palm of your hand.

NOTE: The load board app is not yet available for iPhone or iPad.

With DAT Load Board for Truckers, you get easy-to-use tools that you can’t find with any other load board app.

  • Learns how you work – App remembers your preferences so you save time
  • See up to 500 results at once – No need to thumb through pages
  • Save matches to call later
  • Sort search results by offer rate
  • Broker reviews and credit scores
  • Spot market rates for lanes you search (depending on your DAT subscription)
  • Remembers lanes you recently searched
  • Post your available truck so that brokers find you

The mobile app gives you full access to every load on the DAT Network, so you can find freight for dry van, reefer, flatbed, LTL, hot shot, power only, stepdeck, and much more.

Download DAT Load Board for Truckers in the Google Play Store. Not already a DAT customer? Contact us today to get access to more than 95 million loads posted to DAT Load Boards every year. NOTE: DAT Load Board for Truckers is not available yet for iPhone or iPad.

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Trucking Information

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Nov 27 – Dec 3 vs.
Nov 20 – 26
Nov 2016 vs.
Oct 2016
Nov 2016 vs.
Nov 2015
Spot Market Loads +64% +4.6% +87%
Spot Market Capacity +13% 3.3% +5.1%
Van Load-To-Truck +61% +9.7% +74%
Van Rates (Spot) +4.8% +1.2% 2.3%
Flatbed Load-To-Truck +27% +3.1% +124%
Flatbed Rates (Spot) +1.1% 1.0% 3.6%
Reefer Load-To-Truck +36% +15% +60%
Reefer Rates (Spot) +0.5% +3.2% +0.5%
Fuel Prices +2.4% 0.6% 1.2%
Load-to-Truck Ratios Soar

Rates Climb for Vans, Reefers, Flatbeds

Nov 27 – Dec 3 – As expected, load posts surged last week, following Thanksgiving week in which people took one or more days off. Less expected were the unseasonably high load-to-truck ratios. Last week’s 4.7 load-to-truck ratio for vans is the highest seen since June of 2014. The ratio for reefers was 8.2, the highest since March 2015. Van rates gained 8¢, reefer rates added 1¢, and flatbed rates were up 2¢ compared to the previous week.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.

Last update: 12/6/2016 – Next update: 12/13/2016

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+2.4%$2.48 / gallon
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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Nov 20 – 26 vs.
Nov 13 – 19
Oct 2016 vs.
Sep 2016
Oct 2016 vs.
Oct 2015
Spot Market Loads 30% +2.8% +52%
Spot Market Capacity 28% +3.4% 4.2%
Van Load-To-Truck +2.3% 6.0% +86%
Van Rates (Spot) 0.6% +2.5% 2.9%
Flatbed Load-To-Truck +1.0% +13% +47%
Flatbed Rates (Spot) 1.0% +1.6% 4.5%
Reefer Load-To-Truck 8.9% 0.8% +54%
Reefer Rates (Spot) +0.5% 0.5% 2.1%
Fuel Prices +0.0% +2.5% 2.6%
Van and Flatbed Ratios Rise During Holiday Week

Rates Edge Down

Nov 20 – 26 – Last week began with a flurry of load board activity, but it slowed by Wednesday afternoon for the long Thanksgiving weekend. Rates rose on the high-traffic lanes, but some backhaul lanes lost traction, so adjustments to the national averages were small. Van rates dipped 1¢, reefer rates added 1¢, and flatbed rates fell 2¢, compared to the previous week.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.

Last update: 11/29/2016 – Next update: 12/6/2016

Fuel Prices
+0.0%$2.42 / gallon
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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Nov 13 – 19 vs.
Nov 6 – 12
Oct 2016 vs.
Sep 2016
Oct 2016 vs.
Oct 2015
Spot Market Loads +5.3% +2.8% +52%
Spot Market Capacity +2.1% +3.4% 4.2%
Van Load-To-Truck +3.9% 6.0% +86%
Van Rates (Spot) +0.0% +2.5% 2.9%
Flatbed Load-To-Truck +3.8% +13% +47%
Flatbed Rates (Spot) +1.1% +1.6% 4.5%
Reefer Load-To-Truck +2.6% 0.8% +54%
Reefer Rates (Spot) 0.5% 0.5% 2.1%
Fuel Prices 0.8% +2.5% 2.6%
Demand Increases for Vans, Reefers, Flats

Flatbed Rates Rise 2¢

Nov 13 – 19 – Load-to-truck ratios rose for all equipment types last week, on stronger seasonal demand. Load volume was exceptionally high for vans, but the average van rate was unchanged. Flatbed rates rose 2¢ as a national average, while reefer rates dipped 1¢ per mile.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.

Last update: 11/22/2016 – Next update: 11/29/2016

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Comparing the outbound rates from 15 regions to each of the same 15 regions as destinations, gives you 225 (15 x 15) origin-destination pairs. In the first week of November, 64 of those region-to-region pairs had a rate increase of at least 6¢ per mile, and the biggest increases were on lanes that originated in the West, heading to destinations along the East Coast.

Here are the four region-to-region pairs with the biggest rate increases, comparing last week to the third quarter averages: 

1. California to New England – up 18¢ per mile

2. Upper Mountain States to Florida and Southern Georgia – up 17¢ per mile

3. Pacific Northwest to Florida and Southern Georgia – up 16¢ per mile

4. Lower Mountain States to Lower Atlantic States – up 16¢ per mile

 

Rates have been climbing on many west-to-east lanes throughout the fall season. In nearly every case, rates are up by 6¢ per mile or more. On a region-to-region basis, the biggest rate jumps, of 16¢ to 18¢ per mile, are depicted on the map, above. From top left: (1) Upper Mountain to Florida-South Georgia; (2) Pacific Northwest to Florida-South Georgia; (3) California to New England; and, (4) Lower Mountain to Lower Atlantic.

 

The graph shows 24 region-to-region pairs, with changes in rates for freight movements that originated in four Western regions, labeled by color: Upper Mountain, Lower Mountain, California, and Pacific Northwest. The destinations are in six East Coast regions, listed on the X axis: New England, Upper Atlantic, Lower Atlantic, Carolinas, Florida-South Georgia, and Southeast. Of the 24 region-to-region pairs, only three had declining rates during the first week of November: (1) Lower Mountain to New England; (2) Pacific Northwest to New England; and (3) Upper Mountain to Lower Atlantic.

 

These results are atypical, so they may surprise longtime freight trend watchers. In recent years, fall freight has peaked in September and October. But in 2016, those patterns don’t seem to apply. For example, there is usually a peak for van freight in June on the spot market, followed by declining activity after the Fourth of July. That peak was muted this year, but so was the decline. Now we are starting November with no sign of a seasonal decline in activity. Instead, the freight economy appears to be heating up, at least on the spot market.

There is a clear trend of west-to-east movement, with increased activity in California, the Pacific Northwest and Mountain regions adding to rate pressure in other U.S. regions. Rates are also rising on seasonal traffic from Canada to the U.S., but rates are falling on lanes entering Canada from all over the U.S., except the Lower Mountain region.

If you are moving freight in the eastern half of the U.S., you may not be seeing much rate movement. In some regions, including the Great Lakes and Upper Midwest, rates were actually down 6¢ per mile or more last week. The strength of those west-to-east lanes has led the overall rate trend, however, and that trajectory has been up solidly for the past several months. 

Measured at the national level for trips over 250 miles, spot market van rates are up 8¢ per mile in November, compared to the October average. Rates are up 23¢ per mile since the low point in April, including a 6¢ increase in the fuel surcharge.  

We have seen this trend building for a while in the DAT RateView and load board data, and we identified a few factors that are contributing to higher rates:

1. Strong produce harvests, with declines in California being offset by strong numbers elsewhere.  

2. Hanjin bankruptcy, resulting in supply chain disruption and increased amounts of inventory transfers, to prevent stock-outs.  

3. Weather events, including flooding in Louisiana and the Carolinas, which generate demand for emergency relief, followed by construction supplies and equipment.  

4. Some economic improvement, as indicated in recent ISM and other reports. 

Refrigerated freight is showing renewed strength, as strong harvests give way to a pre-Thanksgiving surge. The national average rate rose to $1.97 per mile for reefers last week, the highest since early July. Strong potato harvests in southern Idaho, as well as apples from Washington and Michigan, add to a respectable volume of iceberg lettuce from the San Joaquin Valley and the Imperial Valley near Yuma, AZ.  California continues to produce strawberries from Santa Maria to Watsonville, as well as a good crop of grapes. Add poultry, dairy products, and refrigerated packaged foods to the mix for Thanksgiving, and demand for reefers should keep

Flatbed freight also shows signs of stability, after a prolonged decline. 

The regional views tell us that freight is remarkably strong for this time of year. While the geographic trends may shift in the next four to six weeks, it is reasonable to expect a continuation of the atypically high volume and rates on the spot freight market through the end of the year. 

Track changes in spot market freight rates with DAT RateView, which offers real-time spot market and current contract rates, based on more than $28 billion in actual transactions. 

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Nov 6 – 12 vs.
Oct 30 – Nov 5
Oct 2016 vs.
Sep 2016
Oct 2016 vs.
Oct 2015
Spot Market Loads 1.2% +2.8% +52%
Spot Market Capacity +3.2% +3.4% 4.2%
Van Load-To-Truck 7.2% 6.0% +86%
Van Rates (Spot) 1.8% +2.5% 2.9%
Flatbed Load-To-Truck +0.1% +13% +47%
Flatbed Rates (Spot) 1.0% +1.6% 4.5%
Reefer Load-To-Truck 4.7% 0.8% +54%
Reefer Rates (Spot) 1.0% 0.5% 2.1%
Fuel Prices 1.2% +2.5% 2.6%
Rates Remain Strong for Vans in Mid-November

Rates Decline From Late-Season Peak

Nov 6 – 12 – Rates were down for vansreefers, and flatbeds last week, after a big boost in the first few days of the month. Compared to the previous week, average rates fell 3¢ per mile for vans, 2¢ for reefers and 2¢ for flatbeds. Rates for vans and reefers remain very strong for this time of year, however.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.

Last update: 11/15/2016 – Next update: 11/22/2016

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Year-End Tax Planning for Businesses

There are a number of end of year tax planning strategies that businesses can use to reduce their tax burden for 2016. Here are a few of them:

Deferring Income

Businesses using the cash method of accounting can defer income into 2017 by delaying end-of-year invoices so payment is not received until 2017. Businesses using the accrual method can defer income by postponing delivery of goods or services until January 2017.

Purchase New Business Equipment

Section 179 Expensing. Business should take advantage of Section 179 expensing this year for a couple of reasons. First, is that in 2016 businesses can elect to expense (deduct immediately) the entire cost of most new equipment up to a maximum of $500,000 for the first $2,010,000 million of property placed in service by December 31, 2016. Keep in mind that the Section 179 deduction cannot exceed net taxable business income. The deduction is phased out dollar for dollar on amounts exceeding the $2.01 million threshold and eliminated above amounts exceeding $2.5 million.

Bonus Depreciation. Businesses are able to depreciate 50 percent of the cost of equipment acquired and placed in service during 2015, 2016 and 2017. However, the bonus depreciation is reduced to 40 percent in 2018 and 30 percent in 2019.

Qualified property is defined as property that you placed in service during the tax year and used predominantly (more than 50 percent) in your trade or business. Property that is placed in service and then disposed of in that same tax year does not qualify, nor does property converted to personal use in the same tax year it is acquired.

Note: Many states have not matched these amounts and, therefore, state tax may not allow for the maximum federal deduction. In this case, two sets of depreciation records will be needed to track the federal and state tax impact.

Please contact the office if you have any questions regarding qualified property.

Timing. If you plan to purchase business equipment this year, consider the timing. You might be able to increase your tax benefit if you buy equipment at the right time. Here’s a simplified explanation:

Conventions. The tax rules for depreciation include “conventions” or rules for figuring out how many months of depreciation you can claim. There are three types of conventions. To select the correct convention, you must know the type of property and when you placed the property in service.

    1. The half-year convention: This convention applies to all property except residential rental property, nonresidential real property, and railroad gradings and tunnel bores (see mid-month convention below) unless the mid-quarter convention applies. All property that you begin using during the year is treated as “placed in service” (or “disposed of”) at the midpoint of the year. This means that no matter when you begin using (or dispose of) the property, you treat it as if you began using it in the middle of the year.

Example: You buy a $40,000 piece of machinery on December 15. If the half-year convention applies, you get one-half year of depreciation on that machine.

    1. The mid-quarter convention: The mid-quarter convention must be used if the cost of equipment placed in service during the last three months of the tax year is more than 40 percent of the total cost of all property placed in service for the entire year. If the mid-quarter convention applies, the half-year rule does not apply, and you treat all equipment placed in service during the year as if it were placed in service at the midpoint of the quarter in which you began using it.
    2. The mid-month convention: This convention applies only to residential rental property, nonresidential real property, and railroad gradings and tunnel bores. It treats all property placed in service (or disposed of) during any month as placed in service (or disposed of) on the midpoint of that month.

If you’re planning on buying equipment for your business, call the office and speak to a tax professional who can help you figure out the best time to buy that equipment and take full advantage of these tax rules.

Other Year-End Moves to Take Advantage Of

Small Business Health Care Tax Credit. Small business employers with 25 or fewer full-time-equivalent employees (average annual wages of $52,000 in 2016) may qualify for a tax credit to help pay for employees’ health insurance. The credit is 50 percent (35 percent for non-profits).

Business Energy Investment Tax Credit. Business energy investment tax credits are still available for eligible systems placed in service on or before December 31, 2016, and businesses that want to take advantage of these tax credits can still do so.

Business energy credits include solar energy systems (passive solar and solar pool-heating systems excluded), fuel cells and microturbines, and an increased credit amount for fuel cells. The extended tax provision also established new credits for small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems. Utilities are allowed to use the credits as well.

Repair Regulations. Where possible, end of year repairs and expenses should be deducted immediately, rather than capitalized and depreciated. Small businesses lacking applicable financial statements (AFS) are able to take advantage of de minimis safe harbor by electing to deduct smaller purchases ($2,500 or less per purchase or per invoice). Businesses with applicable financial statements are able to deduct $5,000. Small business with gross receipts of $10 million or less can also take advantage of safe harbor for repairs, maintenance, and improvements to eligible buildings. Please call if you would like more information on this topic.

Partnership or S-Corporation Basis. Partners or S corporation shareholders in entities that have a loss for 2016 can deduct that loss only up to their basis in the entity. However, they can take steps to increase their basis to allow a larger deduction. Basis in the entity can be increased by lending the entity money or making a capital contribution by the end of the entity’s tax year.

Caution: Remember that by increasing basis, you’re putting more of your funds at risk. Consider whether the loss signals further troubles ahead.

Section 199 Deduction. Businesses with manufacturing activities could qualify for a Section 199 domestic production activities deduction. By accelerating salaries or bonuses attributable to domestic production gross receipts in the last quarter of 2016, businesses can increase the amount of this deduction. Please call to find out how your business can take advantage of Section 199.

Retirement Plans. Self-employed individuals who have not yet done so should set up self-employed retirement plans before the end of 2016. Call today if you need help setting up a retirement plan.

Dividend Planning. Reduce accumulated corporate profits and earnings by issuing corporate dividends to shareholders.

Budgets. Every business, whether small or large should have a budget. The need for a business budget may seem obvious, but many companies overlook this critical business planning tool.

A budget is extremely effective in making sure your business has adequate cash flow and in ensuring financial success. Once the budget has been created, then monthly actual revenue amounts can be compared to monthly budgeted amounts. If actual revenues fall short of budgeted revenues, expenses must generally be cut.

Tip: Year-end is the best time for business owners to meet with their accountants to budget revenues and expenses for the following year.

If you need help developing a budget for your business, don’t hesitate to call.

Call a Tax Professional First

These are just a few of the year-end planning tax moves that could make a substantial difference in your tax bill for 2016. If you’d like more information about tax planning for 2017, please call to schedule a consultation to discuss your specific tax and financial needs, and develop a plan that works for your business.

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Oct 30 – Nov 5 vs.
Oct 23 – 29
Oct 2016 vs.
Sep 2016
Oct 2016 vs.
Oct 2015
Spot Market Loads +4.8% +2.8% +52%
Spot Market Capacity 2.0% +3.4% 4.2%
Van Load-To-Truck +9.4% 6.0% +86%
Van Rates (Spot) +3.0% +2.5% 2.9%
Flatbed Load-To-Truck 1.6% +13% +47%
Flatbed Rates (Spot) 0.5% +1.6% 4.5%
Reefer Load-To-Truck +13% 0.8% +54%
Reefer Rates (Spot) +3.7% 0.5% 2.1%
Fuel Prices 0.4% +2.5% 2.6%
Van Rates Near 2015 Levels

Rates Rise for Vans and Reefers

Oct 30 – Nov 5 – Rates rose last week for vans and reefers. For vans, rates were up 5¢ week over week, and were just 1¢ below where they were a year ago. For reefers, rates looked more like the June produce peak than the first week in November, jumping 7¢ from the previous week.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.
Last update: 11/8/2016 – Next update: 11/15/2016

Fuel Prices
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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Oct 23 – 29 vs.
Oct 16 – 22
Oct 2016 vs.
Sep 2016
Oct 2016 vs.
Oct 2015
Spot Market Loads 3.6% +2.8% +52%
Spot Market Capacity 1.2% +3.4% 4.2%
Van Load-To-Truck 0.2% 6.0% +86%
Van Rates (Spot) 0.6% +2.5% 2.9%
Flatbed Load-To-Truck 8.0% +13% +47%
Flatbed Rates (Spot) +0.5% +1.6% 4.5%
Reefer Load-To-Truck +2.2% 0.8% +54%
Reefer Rates (Spot) +0.0% 0.5% 2.1%
Fuel Prices 0.1% +2.5% 2.6%
October Load Availability Beats 2015 Level

Rates Rise in October for Vans and Flatbeds

Oct 23 – 29 – Load availability and rates rose in October, compared to September. Freight volume also exceeded 2015 levels for the month, but rates did not catch up to the previous year’s highs.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.
Last update: 11/1/2016 – Next update: 11/8/2016

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Darker-colored states have higher load-to-truck ratios, meaning that there’s less competition for reefer loads in those states.

TOP MARKETS FOR REEFER LOAD POSTS

  1. Chicago
  2. Charlotte
  3. Dallas
  4. Twin Falls, ID
  5. Grand Rapids, MI

Rates below include fuel surcharges and are based on real transactions between carriers and brokers.

RISING

  • Mexican produce led to more loads and higher rates in Nogales, AZ, and McAllen, TX
  • Volumes were also up in Dallas and Ontario, CA, but rates hadn’t responded yet
  • Several lanes heading into Denver paid better
  • Sacramento to Denver rose ▲20¢ to $2.15/mile
  • Fresno to Denver was up ▲14¢ for an average of $2.24/mile
  • Chicago to Denver also gained ▲14¢ at $2.24/mile
  • Elizabeth, NJ to Atlanta was another lane that added ▲14¢, to $1.78/mile, to compensate for lower rates out of Atlanta.

FALLING

  • There were a lot fewer reefer loads moving out of Grand Rapids, though it’s still in the top 5 for reefer load posts. Rates are trending down on most outbound lanes
  • Long haul reefer freight from the West Coast trended down — for example, Ontario, CA to Chicago lost ▼14¢ to $1.64/mile
  • Regional freight moving from Sacramento to Los Angeles paid less last week, down ▼16¢ to $2.16/mile, which is early for this direction to slip lower.
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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Oct 16 – 22 vs.
Oct 9 – 15
Sep 2016 vs.
Aug 2016
Sep 2016 vs.
Sep 2015
Spot Market Loads +1.8% +2.8% +34%
Spot Market Capacity +2.5% 7.2% 1.8%
Van Load-To-Truck 6.4% +9.7% +63%
Van Rates (Spot) +0.0% +1.2% 6.4%
Flatbed Load-To-Truck +6.3% +20% +22%
Flatbed Rates (Spot) 0.5% 1.1% 8.3%
Reefer Load-To-Truck +1.5% +7.8% +26%
Reefer Rates (Spot) 0.5% +1.1% 5.0%
Fuel Prices +0.0% +1.9% 4.4%
Van Load Volume Falls 3% After Brief Surge

Rates Dip 1¢ Per Mile for Reefers and Flatbeds

Oct 16 – 22 – Load posts increased for flatbeds and reefers last week, but van load volume fell 3% after a brief surge in the previous week. Nationally, average rates slipped 1¢ per mile for reefers and flatbeds, but van rates held steady.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.
Last update: 10/25/2016 – Next update: 11/1/2016

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Oct 9 – 15 vs.
Oct 2 – 8
Sep 2016 vs.
Aug 2016
Sep 2016 vs.
Sep 2015
Spot Market Loads +5.6% +2.8% +34%
Spot Market Capacity +0.5% 7.2% 1.8%
Van Load-To-Truck +3.0% +9.7% +63%
Van Rates (Spot) 1.2% +1.2% 6.4%
Flatbed Load-To-Truck +9.8% +20% +22%
Flatbed Rates (Spot) +0.0% 1.1% 8.3%
Reefer Load-To-Truck +3.7% +7.8% +26%
Reefer Rates (Spot) 0.5% +1.1% 5.0%
Fuel Prices +1.6% +1.9% 4.4%
Van and Reefer Rates Decline

Ratios Rise after Hurricane Matthew

Oct 9 – 15 – Load posts on the West Coast slowed after weeks of high demand, but volumes and rates were up in Southeast markets following Hurricane Matthew. Nationally, the van rate fell 2¢, reefer rates slipped 1¢ and flatbed rates held steady, but the load-to-truck ratios were up for all trailer types.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.
Last update: 10/18/2016 – Next update: 10/25/2016

Fuel Prices
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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Oct 2 – 8 vs.
Sep 25 – Oct 1
Sep 2016 vs.
Aug 2016
Sep 2016 vs.
Sep 2015
Spot Market Loads 6.2% +2.8% +34%
Spot Market Capacity +2.3% 7.2% 1.8%
Van Load-To-Truck 9.3% +9.7% +63%
Van Rates (Spot) +3.7% +1.2% 6.4%
Flatbed Load-To-Truck 6.6% +20% +22%
Flatbed Rates (Spot) +2.1% 1.1% 8.3%
Reefer Load-To-Truck 6.6% +7.8% +26%
Reefer Rates (Spot) +0.5% +1.1% 5.0%
Fuel Prices +2.0% +1.9% 4.4%
Vans, Reefers and Flatbeds Get a Boost

Rates Rise, Despite Falling Volumes

Oct 2 – 8 – Rates were up last week, but volumes were down. Hurricane Matthew likely contributed to both, with shippers paying more to move loads ahead of the storm, and then locking everything down at the end of the week, with a lot fewer load posts on Friday before the storm hit. Van rates gained 6¢ per mile as a national average, while reefer rates added 1¢ and flatbed rates increased 4¢. Inbound rates could move higher this week in hard-hit areas like the Carolinas.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.

Last update: 10/11/2016 – Next update: 10/18/2016

Fuel Prices
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Choosing the Right Business

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When you decide to start a business, one of the most important decisions you’ll need to make is choosing the right business entity. It’s a decision that impacts many things–from the amount of taxes you pay to how much paperwork you have to deal with and what type of personal liability you face.

Forms of Business

The most common forms of business are Sole Proprietorships, Partnerships, Limited Liability Companies (LLCs), and Corporations (C-Corporations). Federal tax law also recognizes another business form called the S-Corporation. While state law controls the formation of your business, federal tax law controls how your business is taxed.

What to Consider

Businesses fall under one of two federal tax systems:

1. Taxation of both the entity itself on the income it earns and the owners on dividends or other profit participation the owners receive from the business. C-Corporations fall under this system of federal taxation.2. “Pass through” taxation. This type of entity (also called a “flow-through” entity) is not taxed, but its owners are each taxed (more or less) on their proportionate shares of the entity’s income. Pass-through entities include:

  • Sole Proprietorships
  • Partnerships, of various types
  • Limited liability companies (LLCs)
  • “S-Corporations” (S-Corps), as distinguished from C-corporations (C-Corps)

The first major consideration when choosing a business entity is whether to choose one that has two levels of tax on income or one that is a pass-through entity with only one level directly on the owners.

The second consideration, which has more to do with business considerations rather than tax considerations, is the limitation of liability (protecting your assets from claims of business creditors).

Let’s take a general look at each of the options more closely:

Types of Business Entities

Sole Proprietorships

The most common (and easiest) form of business organization is the sole proprietorship. Defined as any unincorporated business owned entirely by one individual, a sole proprietor can operate any kind of business (full or part-time) as long as it is not a hobby or an investment. In general, the owner is also personally liable for all financial obligations and debts of the business.

Note: If you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation.

Types of businesses that operate as sole proprietorships include retail shops, farmers, large companies with employees, home-based businesses and one-person consulting firms.

As a sole proprietor, your net business income or loss is combined with your other income and deductions and taxed at individual rates on your personal tax return. Because sole proprietors do not have taxes withheld from their business income, you may need to make quarterly estimated tax payments if you expect to make a profit. Also, as a sole proprietor, you must also pay self-employment tax on the net income reported.

Partnerships

A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.

There are two types of partnerships: Ordinary partnerships, called “general partnerships,” and limited partnerships that limit liability for some partners but not others. Both general and limited partnerships are treated as pass-through entities under federal tax law, but there are some relatively minor differences in tax treatment between general and limited partners.

For example, general partners must pay self-employment tax on their net earnings from self-employment assigned to them from the partnership. Net earnings from self-employment include an individual’s share, distributed or not, of income or loss from any trade or business carried on by a partnership. Limited partners are subject to self-employment tax only on guaranteed payments, such as professional fees for services rendered.

Partners are not employees of the partnership and do not pay any income tax at the partnership level. Partnerships report income and expenses from its operation and pass the information to the individual partners (hence the pass-through designation).

Because taxes are not withheld from any distributions partners generally need to make quarterly estimated tax payments if they expect to make a profit. Partners must report their share of partnership income even if a distribution is not made. Each partner reports his share of the partnership net profit or loss on his or her personal tax return.

Limited Liability Companies (LLC)

A Limited Liability Company (LLC) is a business structure allowed by state statute. Each state is different, so it’s important to check the regulations in the state you plan to do business in. Owners of an LLC are called members, which may include individuals, corporations, other LLCs and foreign entities. Most states also permit “single member” LLCs, i.e. those having only one owner.

Depending on elections made by the LLC and the number of members, the IRS treats an LLC as either a corporation, partnership, or as part of the LLC’s owner’s tax return. A domestic LLC with at least two members is classified as a partnership for federal income tax purposes unless it elects to be treated as a corporation.

An LLC with only one member is treated as an entity disregarded as separate from its owner for income tax purposes (but as a separate entity for purposes of employment tax and certain excise taxes), unless it elects to be treated as a corporation.

C-Corporations

In forming a corporation, prospective shareholders exchange money, property, or both, for the corporation’s capital stock. A corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders.

A corporate structure is more complex than other business structures. When you form a corporation, you create a separate tax-paying entity. The profit of a corporation is taxed to the corporation when earned and then is taxed to the shareholders when distributed as dividends. This creates a double tax.

The corporation does not get a tax deduction when it distributes dividends to shareholders. Earnings distributed to shareholders in the form of dividends are taxed at individual tax rates on their personal tax returns. Shareholders cannot deduct any loss of the corporation.

If you organize your business as a corporation, generally are not personally liable for the debts of the corporation, although there may be exceptions under state law.

S-Corporations

An S-corporation has the same corporate structure as a standard corporation; however, its owners have elected to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S-corporations generally have limited liability.

Generally, an S-Corporation is exempt from federal income tax other than tax on certain capital gains and passive income. It is treated in the same way as a partnership, in that generally taxes are not paid at the corporate level. S-Corporations may be taxed under state tax law as regular corporations, or in some other way.

Shareholders must pay tax on their share of corporate income, regardless of whether it is actually distributed. Flow-through of income and losses is reported on their personal tax returns and they are assessed tax at their individual income tax rates, allowing S-Corporations to avoid double taxation on the corporate income.

To qualify for S-Corporation status, the corporation must meet a number of requirements. Please call if you would like more information about which requirements must be met to form an S-Corporation.

Professional Guidance

When making a decision about which type of business entity to choose each business owner must decide which one best meets his or her needs. One form of business entity is not necessarily better than any other and obtaining the advice of a tax professional is critical. If you need assistance figuring out which business entity is best for your business, don’t hesitate to call.

DAT News & Blogs

I recently had the opportunity to look at LTL (Less than truckload or partial truckload) shipments in DAT’s rate and load databases. I think what I learned could help you increase your revenue and help you price LTL freight.

On an average week, about 6% of the loads posted on DAT are LTL shipments. Most truckers on the load board prefer to carry full truckloads, so only 7% of truckers post their trucks as available to carry LTL. For these truckers, the national LTL-to-truck ratio is about 2.2 loads per truck per week. This shows that LTL shipments are available.

Since LTL shipments pay less than truckload, how could they increase a truckload carrier’s revenue per mile?  Although LTL shipments pay less, they’re significantly lighter and take up a smaller percentage of a truck’s volume and weight capacity. Because of that – plus the work in smaller pick-ups along with consolidated LTL freight in the competitive trucking market – LTL shipments pay 2 to 6 times more than truckload freight on a per-pound and per-cubic-foot basis.

HOW DO YOU PRICE LTL LOADS?

Just as full truckload prices vary from lane to lane, so do LTL shipment prices. During my analysis I found that the LTL shipment prices could be shown as a percentage of the going truckload price when grouped into specific weight bands. On average, I found that:

  • Shipments less than 1,000 lbs generally pay about 15% of a truckload while taking well under 5% of a trailer’s total space.
  • Shipments between 1,000 and 5,000 lbs generally pay about 30% of a truckload while taking less than 5% of a trailer’s space.
  • Heavier shipments – greater than 5,000 lbs – generally pay about 60% of a full truckload and max out at about 30% of a trailer’s total space.

You can take the average spot market rates you see in DAT load boards or the broker-to-carrier rates in DAT RateView and multiply that by the percentages above. That can work as a starting price for LTL freight when talking to brokers. If you are pricing directly for a shipper customer, those broker-to-carrier rates are still useful, but you’ll want to add in a margin since you are doing the sales effort. The experts tell me that the margin on LTL freight is typically higher than truckload, so adding around 20% should keep your rate competitive for shipper customers.

A truckload carrier has at least three opportunities to use LTLs when they appear on the load board or from a customer:

1. Couple an LTL or partial load on the trailer with a truckload that doesn’t weigh out and doesn’t fill the full space of the truck.  For example: If you have a truckload that weighs 40,000 lbs and takes up 2,000 cubic feet of space, then adding an LTL load (going to the same destination) that is 3,000 lbs and takes up 150 cubic feet of space would increase your revenue per mile significantly.

2. Consolidate two or more partials into a full or nearly full truckload. Consolidation offers potentially high returns and a rate that’s higher than the standard truckload rate. Just keep in mind that LTL freight can be a lot more labor intensive than truckload. Consolidating several small shipments and loading them in the order in which they need to be delivered can be tricky.

3. Get a partial in a situation where you might otherwise deadhead. Maybe there is an LTL available, but there just isn’t a full truckload. Other times, the lower weight and easier loading/unloading of an LTL could make it work where a full truckload wouldn’t make sense. Besides, receiving a percentage of a truckload price is better than nothing!

Next time you are on the load board, keep an eye out for LTL shipments. Finding the perfect LTL load might make your trip that much more productive.  Tell us in the comments section if your efforts with LTL freight improved your revenue or if you have tried LTL and it didn’t work out.

Trucking Success partners with DAT to offer a special on the TruckersEdge load board. Sign up for TruckersEdge today and get your first 30 days free by signing up at http://www.truckersedge.net/promo123 or entering “promo123” during sign up.

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DAT Trendlines

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Sep 25 – Oct 1 vs.
Sep 18 – 24
Sep 2016 vs.
Aug 2016
Sep 2016 vs.
Sep 2015
Spot Market Loads +7.2% +2.8% +34%
Spot Market Capacity 1.9% 7.2% 1.8%
Van Load-To-Truck +12% +9.7% +63%
Van Rates (Spot) 1.2% +1.2% 6.4%
Flatbed Load-To-Truck +8.6% +20% +22%
Flatbed Rates (Spot) +0.0% 1.1% 8.3%
Reefer Load-To-Truck +8.1% +7.8% +26%
Reefer Rates (Spot) +0.0% +1.1% 5.0%
Fuel Prices +0.4% +1.9% 4.4%
Load Availability Rises 7% as Third Quarter Ends

Van Rates Lose 2¢ on Mixed Regional Results

Sep 25 – Oct 1 – Load availability increased, but van rates lost 2¢ per mile as a national average. Results varied by region, as outbound rates rose in most West Coast markets. Reefer and flatbed rates held steady last week, with seasonal changes in some key markets. Rates may rise in the Southeast this week, as shippers attempt to move freight out of the path of an oncoming hurricane.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.
Last update: 10/4/2016 – Next update: 10/11/2016

Fuel Prices
+0.4% – $2.39 / gallon
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Some unlikely places have been popping up at the top of our list of markets with the most reefer loads in the past couple of weeks. If you look at the Hot States Map below, you’ll see that Idaho is deep blue. Twin Falls, in the southern part of the state, has been the number 1 market for reefer load posts on DAT TruckersEdge for two weeks in a row. In other words, there are a lot of potatoes and onions that need shipping, and not enough trucks there to haul them.

Eastern Oregon also grows potatoes and onions, and Pendleton, OR has had more reefer loads in the past couple of weeks than either Dallas or Atlanta.

Darker-colored states have higher load-to-truck ratios, meaning that there’s less competition for reefer loads in those states.

TOP 5 FOR REEFER LOADS

These markets had the most reefer load posts last week:

  1. Twin Falls, ID
  2. Chicago, IL
  3. Elizabeth, NJ
  4. Grand Rapids, MI
  5. Pendleton, OR

Rates below include fuel surcharges and are based on real transactions between carriers and brokers.

RISING:

  • Twin Falls to Chicago rates were up ▲24¢ to $1.89/mile
  • Twin Falls to Baltimore paid an average of $2.17/mile, and there are a lot of miles on that trip
  • Outbound rates in Dallas rebounded last week and are back to about where they were a month ago

Prices were steady in California for the most part, but two lanes got big raises. They both go to difficult markets, though, so you’ll want to make your money going in:

  • L.A. to Denver rose ▲28¢ to $2.52/mile.
  • Sacramento to Portland, OR was up ▲20¢ and also averaged $2.52/mile

Midwest reefer rates were mostly down, but Green Bay to Minneapolis paid ▲20¢ better, at $2.10/mile

FALLING:

Rates out of Chicago took a step back last week.

  • Chicago to Atlanta fell ▼12¢ but still averaged $2.51/mile (That lane has already gained some of that back this week.)
  • Chicago to Kansas City also lost ▼13¢ and paid an average of $2.12/mile

Apple shipments might be slowing down in Michigan. The lane from Grand Rapids to Atlanta fell ▼24¢ to $2.32/mile.

One lane out West saw a big drop: Fresno to Denver lost ▼20¢ at $2.02/mile.

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Darker-colored states have higher load-to-truck ratios, meaning that there’s less competition for van loads in those states.

Retailers are starting to shift inventory from West Coast distribution centers to other DCs out East. L.A. outbound rates are up, especially on eastbound lanes, and the City of Angels jumped up to number 2 in load posts (number 1 is Chicago).

On the top 100 van lanes, more had rates go up than down last week, but prices changes were generally small. Seattle rates have also been trending up, which is partly due to fall harvests in Washington State, but it could also be related to the disruption of ocean freight. There’s extra traffic out of Stockton, CA, too.

Rates below include fuel surcharges and are averages based on real transactions between carriers and brokers.

RISING LANE RATES

  • Seattle to Salt Lake City added ▲13¢ to an average of $1.83/mile
  • The backhaul lane from Portland, OR, to Stockton paid ▲14¢ better, averaging $1.42/mile
  • The headhaul direction also paid better: Rates for Stockton to Portland were up to $2.29/mile

FALLING LANE RATES

There were fewer loads moving out of Columbus and Chicago last week, but rates were still strong. Prices slipped in the Northeast, though.

Two lanes out of Buffalo lost some recent gains:

  • Buffalo to Charlotte fell ▼25¢ to $1.44/mile
  • Buffalo to Chicago also dropped ▼10¢ to just $1.26/mile

The average rate on the lane from Allentown, PA, to Boston fell ▼10¢ to $3.08/mile. That rate might still look good, but loads are hard to come by once you get to Boston.

Trucking Success partners with DAT to offer a special on the TruckersEdge load board. Sign up for TruckersEdge today and get your first 30 days free by signing up at http://www.truckersedge.net/promo123 or entering “promo123” during sign up.

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Sep 18 – 24 vs.
Sep 11 – 17
Aug 2016 vs.
Jul 2016
Aug 2016 vs.
Aug 2015
Spot Market Loads 4.5% +0.5% +29%
Spot Market Capacity +3.4% +14% +8.6%
Van Load-To-Truck 10% 4.6% +49%
Van Rates (Spot) +0.0% 1.2% 8.0%
Flatbed Load-To-Truck 0.3% 26% 6.0%
Flatbed Rates (Spot) 0.5% 1.6% 8.2%
Reefer Load-To-Truck 9.2% +4.8% +16%
Reefer Rates (Spot) +0.0% 2.1% 6.9%
Fuel Prices 0.4% 2.2% 9.4%
National Average Rates Hold Steady

Hanjin Woes Boost Spot Market Truck Freight

Sep 18 – 24 – Trucks on the West Coast are feeling some ripple effects from the Hanjin Shipping bankruptcy and resulting supply chain shake-up. Spot market van freight volume and rates surged last week in L.A., but national rate trends were stable.

Last update: 9/27/2016 – Next update: 10/4/2016

Fuel Prices
-0.4%$2.38 / gallon
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Owner Operator Truck Driver Loads

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Sep 11 – 17 vs.
Sep 4 – 10
Aug 2016 vs.
Jul 2016
Aug 2016 vs.
Aug 2015
Spot Market Loads +20% +0.5% +29%
Spot Market Capacity +19% +14% +8.6%
Van Load-To-Truck 4.4% 4.6% +49%
Van Rates (Spot) 1.2% 1.2% 8.0%
Flatbed Load-To-Truck +8.1% 26% 6.0%
Flatbed Rates (Spot) +1.1% 1.6% 8.2%
Reefer Load-To-Truck +0.6% +4.8% +16%
Reefer Rates (Spot) 1.0% 2.1% 6.9%
Fuel Prices 0.4% 2.2% 9.4%
Van and Reefer Rates Drop 2¢, But Remain Strong

Flatbed Rates Recover 2¢

Sep 11 – 17 – Spot market freight trends were out of sync last week. Load-to-truck ratios held steady for vans and reefers, but rates fell 2¢ per mile for both trailer types. Rates are still strong for the season, however. Flatbed rates and ratios recovered, on the other hand, at a time of year when those indicators typically decline.

Last update: 9/20/2016 – Next update: 9/27/2016

Fuel Prices

-0.4%$2.39 / gallon

DAT News & Blogs

This week is National Truck Driver Appreciation Week. We’ve put together a list of five ways that carriers, brokers, and shippers can show appreciation and respect to a driver, including suggestions from the drivers themselves.

1. Respect the Driver’s Time

An extra 15 minutes held up at a loading dock or stuck in traffic can be the difference between a driver getting home to family and being stuck in the sleeper cabin another night. Drivers take extra care to manage their hours-of-service (HOS) and mandatory breaks so they can avoid situations like that.

There might not be anything you can do about the traffic, but you can help by not detaining drivers any longer than necessary when loading and unloading the truck or counting product. Or if the driver is detained longer than the standard two hour grace period, compensate them for their time. Just like yours, the driver’s time is valuable.

2. Fair Pay

Drivers tend to stay with companies that show that their work is appreciated, and driver retention is a key concern for carriers. Truck drivers have unique skill sets, and with the shortage of new drivers entering the industry, those skills are increasingly rare in today’s work force. That’s why they deserve to be well-compensated for the specialized services that they provide, whether that means getting paid by the hour or by the mile.

3. Honesty

Will the load be available in the morning? Is there anywhere to park the truck if the driver arrives at the destination early? Will there be lumpers, and who’s paying the fee? Are the pallets shrinkwrapped?

Letting the driver know everything there is to know about the load shows that you appreciate what goes into doing the job well.

4. Time at Home

A lot of drivers got into the job because they like the open road. That doesn’t mean they want to live there. Home time matters big time.

For carriers, that means learning your drivers’ preferences. Some may want short runs, while others are happy to be away from home for long stretches. Show your appreciation by doing your best to match each driver with the schedule that best fits his or her needs.

5. Access to Facilities

When drivers arrive at the delivery dock, they’ve likely just spent a few hours behind the wheel. Give them access to the facilities. A couch, cup of coffee, or just access to the bathroom is a simple gesture of appreciation for the person who just safely delivered your valuable freight.

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Sep 4 – 10 vs.
Aug 28 – Sep 3
Aug 2016 vs.
Jul 2016
Aug 2016 vs.
Aug 2015
Spot Market Loads 13% +0.5% +29%
Spot Market Capacity 15% +14% +8.6%
Van Load-To-Truck 0.4% 4.6% +49%
Van Rates (Spot) +0.0% 1.2% 8.0%
Flatbed Load-To-Truck +21% 26% 6.0%
Flatbed Rates (Spot) 1.6% 1.6% 8.2%
Reefer Load-To-Truck 9.1% +4.8% +16%
Reefer Rates (Spot) +0.5% 2.1% 6.9%
Fuel Prices 0.4% 2.2% 9.4%
Van and Reefer Rates Hold Up in Post-Holiday Week

Flatbed Rates Slip 3¢

Sep 4 – 10 – Van rates held onto the previous week’s gains, and reefer rates rose another 1¢ last week, but flatbeds slipped 3¢ per mile, as a national average. Load-to-truck ratios remained stable for vans, but the reefer ratio declined and flatbed demand increased relative to capacity.
Last update: 9/13/2016 – Next update: 9/20/2016

Fuel Prices
-0.4%$2.40 / gallon

DAT News & Blogs

 
Darker-colored states have higher load-to-truck ratios, meaning that there’s less competition for van loads in those states.

Texas volumes have improved, and outbound rates were up the major van lanes from Dallas. Prices in Chicago, Columbus, Seattle, and Philadelphia are all higher than they were a month ago.

Demand for vans has been highest across the northern band of states, and the Midwest has a top region for loads and rates. Chicago, Cleveland, Columbus, Indianapolis, and Joliet, IL, were all in the top 10 for load posts on DAT Load Boards last week. Rates on the lane from Columbus to Buffalo rose 27¢ and paid $2.76/mile on average.

Outbound rates were down in Buffalo, and a couple inbound lanes also paid less: The lane from Charlotte was down 28¢ to $1.90/mile. Chicago to Buffalo also fell 20¢, but it’s still averaging $2.17/mile, which is higher than it was three weeks ago. Out West, the backhaul from Denver to Stockton only paid an average of $0.96/mile.


Darker-colored states have higher load-to-truck ratios, meaning that there’s less competition for reefer loads in those states.

Reefer volumes also held up during the 4-day work week. Of the top 72 reefer lanes, 35 of them paid better, while rates slipped lower on 32 lanes. Northern markets have shown the highest demand: Chicago; Elizabeth, NJ; and Grand Rapids, MI were numbers 1, 2, and 3 for reefer load posts last week.

The two biggest gains on lane rates were also out of the Midwest: Grand Rapids to Madison, WI, was up 29¢ to $2.75/mile, while Green Bay to Joliet rose 29¢ to a nice $3.35/mile. Chicago to Minneapolis dropped 18¢ to $1.93/mile, but you can make more money right now going the other direction. Minneapolis to Chicago rates were up to $2.01/mile.

Out West, the outbound average in Sacramento surged to $2.39/mile, which is just 2¢ shy of the average reefer rate out of Los Angeles.

 

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Identity Theft

Identity Theft and Your Taxes

Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. It presents challenges to individuals, businesses, organizations and government agencies, including the IRS.

Learning that you are a victim of identity theft can be a stressful event and you may not be aware that someone has stolen your identity. In many cases, the IRS may be the first to let you know you’re a victim of ID theft after you try to file your taxes.

The IRS is working hard to stop identity theft using a strategy of prevention, detection, and victim assistance. In 2015, the IRS stopped 1.4 million confirmed ID theft returns and protected $8.7 billion. In the past couple of years, more than 2,000 people have been convicted of filing fraudulent ID theft returns. And, in 2014, the IRS stopped more than $15 billion of fraudulent refunds, including those related to identity theft. Additionally, as the IRS improves its processing filters, the agency has also been able to halt more suspicious returns before they are processed.

Here’s what you should know about identity theft:

1. Protect your Records. Do not carry your Social Security card or other documents with your SSN on them. Only provide your SSN (social Security Number) if it’s necessary and you know the person requesting it. Protect your personal information at home and protect your computers with anti-spam and anti-virus software. Routinely change passwords for all of your Internet accounts.

2. Don’t Fall for Scams. Criminals often try to impersonate your bank, credit card company, and even the IRS in order to steal your personal data. Learn to recognize and avoid those fake emails and texts.

3. Beware of Threatening Phone Calls. Correspondence from the IRS is always in the form of a letter in the mail. The IRS will not call you threatening a lawsuit, arrest, or to demand an immediate tax payment using a prepaid debit card, gift card, or wire transfer.

As schools around the nation re-open, it is important for taxpayers to be particularly aware of a new scam going after students and parents. In this latest scheme, telephone scammers have been targeting students and parents and demanding payments for non-existent taxes, such as the “Federal Student Tax.”

People should be on the lookout for IRS impersonators calling students and demanding that they wire money immediately to pay a fake “federal student tax.” If the person does not comply, the scammer becomes aggressive and threatens to report the student to the police to be arrested.

4. Report ID Theft to Law Enforcement. If you cannot e-file your return because a tax return already was filed using your SSN, consider the following steps:

  • File your taxes by paper and pay any taxes owed.
  • File an IRS Form 14039 Identity Theft Affidavit. Print the form and mail or fax it according to the instructions. You may include it with your paper return.
  • File a report with the Federal Trade Commission using the FTC Complaint Assistant.
  • Contact one of the three credit bureaus so they can place a fraud alert or credit freeze on your account.

5. Complete an IRS Form 14039 Identity Theft Affidavit. Once you’ve filed a police report, file an IRS Form 14039 Identity Theft Affidavit (see below). Print the form and mail or fax it according to the instructions. Continue to pay your taxes and file your tax return, even if you must do so by filing on paper.

6. IRS Notices and Letters. If the IRS identifies a suspicious tax return with your SSN, it may send you a letter asking you to verify your identity by calling a special number or visiting a Taxpayer Assistance Center. This is to protect you from tax-related identity theft.

7. IP PINs. If a taxpayer reports that they are a victim of ID theft or the IRS identifies a taxpayer as being a victim, he or she will be issued an IP PIN. The IP PIN is a unique six-digit number that a victim of ID theft uses to file a tax return. Each year, you will receive an IRS letter with a new IP PIN.

8. Data Breaches. If you learn about a data breach that may have compromised your personal information, keep in mind that not every data breach results in identity theft. Furthermore, not every identity theft case involves taxes. Make sure you know what kind of information has been stolen so you can take the appropriate steps before contacting the IRS.

9. Report Suspicious Activity. If you suspect or know of an individual or business that is committing tax fraud, you can report it on the IRS.gov website.

10. IRS Options. Information about tax-related identity theft is available online at IRS.gov. The IRS has a special section on IRS.gov devoted to identity theft and a phone number available for victims to obtain assistance.

If you have any questions about identity theft and your taxes, don’t hesitate to call the office for assistance. Call 480-940-8351

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Tax Planning

Tax Planning for Small Business Owners

Tax planning is the process of looking at various tax options to determine when, whether, and how to conduct business transactions to reduce or eliminate tax liability.

Many small business owners ignore tax planning. They don’t even think about their taxes until it’s time to meet with their accountants, but tax planning is an ongoing process and good tax advice is a valuable commodity. It is to your benefit to review your income and expenses monthly and meet with your CPA or tax advisor quarterly to analyze how you can take full advantage of the provisions, credits and deductions that are legally available to you.

Although tax avoidance planning is legal, tax evasion – the reduction of tax through deceit, subterfuge, or concealment – is not. Frequently what sets tax evasion apart from tax avoidance is the IRS’s finding that there was fraudulent intent on the part of the business owner. The following are four of the areas the IRS examiners commonly focus on as pointing to possible fraud:

  1. Failure to report substantial amounts of income such as a shareholder’s failure to report dividends or a store owner’s failure to report a portion of the daily business receipts.
  2. Claims for fictitious or improper deductions on a return such as a sales representative’s substantial overstatement of travel expenses or a taxpayer’s claim of a large deduction for charitable contributions when no verification exists.
  3. Accounting irregularities such as a business’s failure to keep adequate records or a discrepancy between amounts reported on a corporation’s return and amounts reported on its financial statements.
  4. Improper allocation of income to a related taxpayer who is in a lower tax bracket such as where a corporation makes distributions to the controlling shareholder’s children.

Tax Planning Strategies

Countless tax planning strategies are available to small business owners. Some are aimed at the owner’s individual tax situation and some at the business itself, but regardless of how simple or how complex a tax strategy is, it will be based on structuring the strategy to accomplish one or more of these often overlapping goals:

  • Reducing the amount of taxable income
  • Lowering your tax rate
  • Controlling the time when the tax must be paid
  • Claiming any available tax credits
  • Controlling the effects of the Alternative Minimum Tax
  • Avoiding the most common tax planning mistakes

In order to plan effectively, you’ll need to estimate your personal and business income for the next few years. This is necessary because many tax planning strategies will save tax dollars at one income level, but will create a larger tax bill at other income levels. You will want to avoid having the “right” tax plan made “wrong” by erroneous income projections. Once you know what your approximate income will be, you can take the next step: estimating your tax bracket.

The effort to come up with crystal-ball estimates may be difficult and by its very nature will be inexact. On the other hand, you should already be projecting your sales revenues, income, and cash flow for general business planning purposes. The better your estimates are, the better the odds that your tax planning efforts will succeed.

Maximizing Business Entertainment Expenses

Entertainment expenses are legitimate deductions that can lower your tax bill and save you money, provided you follow certain guidelines.

In order to qualify as a deduction, business must be discussed before, during, or after the meal and the surroundings must be conducive to a business discussion. For instance, a small, quiet restaurant would be an ideal location for a business dinner. A nightclub would not. Be careful of locations that include ongoing floor shows or other distracting events that inhibit business discussions. Prime distractions are theater locations, ski trips, golf courses, sports events, and hunting trips.

The IRS allows up to a 50 percent deduction on entertainment expenses, but you must keep good records and the business meal must be arranged with the purpose of conducting specific business. Bon appetite!

Important Business Automobile Deductions

If you use your car for business such as visiting clients or going to business meetings away from your regular workplace you may be able to take certain deductions for the cost of operating and maintaining your vehicle. You can deduct car expenses by taking either the standard mileage rate or using actual expenses. In 2016, the mileage reimbursement rate is 54 cents per business mile (57 cents per mile in 2015).

If you own two cars, another way to increase deductions is to include both cars in your deductions. This works because business miles driven is determined by business use. To figure business use, divide the business miles driven by the total miles driven. This strategy can result in significant deductions.

Whichever method you decide to use to take the deduction, always be sure to keep accurate records such as a mileage log and receipts. If you need assistance figuring out which method is best for your business, don’t hesitate to contact the office.

Increase Your Bottom Line When You Work At Home

The home office deduction is quite possibly one of the most difficult deductions ever to come around the block. Yet, there are so many tax advantages it becomes worth the navigational trouble. Here are a few tips for home office deductions that can make tax season significantly less traumatic for those of you with a home office.

Try prominently displaying your home business phone number and address on business cards, have business guests sign a guest log book when they visit your office, deduct long-distance phone charges, keep a time and work activity log, retain receipts and paid invoices. Keeping these receipts makes it so much easier to determine percentages of deductions later on in the year.

Section 179 expensing for tax year 2016 allows you to immediately deduct, rather than depreciate over time, up to $500,000, with a cap of $2,000,000 worth of qualified business property that you purchase during the year. The key word is “purchase.” Equipment can be new or used and includes certain software. All home office depreciable equipment meets the qualification. Some deductions can be taken whether or not you qualify for the home office deduction itself.

If you’re ready to meet with a tax professional to discuss tax planning strategies for your business, call the office today. Call 480-940-8351

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Aug 28 – Sep 3 vs.
Aug 21 – 27
Aug 2016 vs.
Jul 2016
Aug 2016 vs.
Aug 2015
Spot Market Loads +8.4% +0.5% +29%
Spot Market Capacity 2.5% +14% +8.6%
Van Load-To-Truck +16% 4.6% +49%
Van Rates (Spot) +3.7% 1.2% 8.0%
Flatbed Load-To-Truck +4.4% 26% 6.0%
Flatbed Rates (Spot) +0.5% 1.6% 8.2%
Reefer Load-To-Truck +14% +4.8% +16%
Reefer Rates (Spot) +1.6% 2.1% 6.9%
Fuel Prices +0.0% 2.2% 9.4%
Freight Rates and Ratios Rise at End of Month

Van Rates Add 6¢

Aug 28 – Sep 3 – Van rates jumped 6¢ and reefers added 3¢ last week. Even flatbeds got a 1¢ raise, due to an increase in the fuel surcharge. Load-to-truck ratios got a healthy boost, so the higher rates may outlast end-of-month and pre-holiday pressure.
Last update: 9/6/2016 – Next update: 9/13/2016

Fuel Prices
+0.0%$2.41 / gallon