The trucking industry is showing signs of stabilization as freight demand and capacity approach equilibrium, according to recent data and insights from industry experts. After years of pandemic-induced disruption, a combination of economic shifts and structural changes within the industry is gradually realigning the market.
During the pandemic, consumer spending shifted heavily toward goods over services, creating a surge in freight demand and pushing rates higher. This led to an influx of new drivers and capacity. However, the subsequent freight market downturn, which began nearly two years ago, resulted in an oversupply of capacity relative to declining demand.
Carter Vieth, a research associate at ACT Research, observed that freight demand trends are gradually improving, with shippers moving goods earlier due to potential dockworker strikes and tariff concerns. ACT Research’s October data showed its volume index rising 7.4 points to 56.9, while the capacity index dipped 1.1 points to 49.7. These changes pushed the supply-demand balance index to 57.2, up from 48.8 in the previous month.
Despite this progress, the market remains in a state of “stable, sustained oversupply,” according to Michael Castagnetto, president of North American Surface Transportation operations at C.H. Robinson. Key factors like flat industrial production, declining housing starts, and reduced consumer spending continue to limit significant growth in freight demand.
One indicator of this balance is the consistency in “route guide depth,” which reflects carriers’ willingness to accept freight offers. Typically, a sustained increase in route guide depth signals market tightening, but current trends suggest flat demand, allowing carriers little leverage to select preferred freight.
Surveys from Truckstop and Bloomberg Intelligence reveal cautious optimism among carriers, with 6% expecting spot rates to rise and 7% anticipating higher freight volumes over the next three to six months. However, 15% of carriers still plan to exit the industry, highlighting ongoing challenges. Lee Klaskow, a senior freight transportation analyst, noted that carrier exits could accelerate the return to market equilibrium, potentially setting the stage for rate improvements next year.
The rationalization of excess capacity continues to shape market dynamics. According to Commercial Motor Vehicle Consulting, the trucking industry has reached a neutral pricing environment, where neither carriers nor shippers have substantial pricing power. This balance follows significant capacity reductions, including the collapse of major carriers like Yellow, which shed 34,000 jobs in July.
Dean Croke, principal analyst at DAT Freight & Analytics, emphasized that capacity adjustments are still chasing elusive demand. While factors such as high interest rates and shifting consumer behavior have constrained growth, emerging seasonality and market predictability signal potential improvements.
Croke also highlighted the ongoing exodus of carriers, with 7,000 carriers leaving the market each month in 2023. Since the surge of new carriers during the pandemic, only 18% remain active. This attrition, combined with steady demand from retail sales and international trade, is expected to support a rebalancing of rates and capacity in the near future.
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