A recent report from FreightWaves Daily (FW) does much to explain the current freight market and operating environment, citing the imbalance of supply and demand as the root cause.
A recent report from FreightWaves Daily (FW) does much to explain the current freight market and operating environment, citing the imbalance of supply and demand as the root cause.
According to FW, freight volumes are at some of the highest levels so far in 2023, up 16% over 2019 pre-pandemic levels. However, truckload capacity far exceeds the freight available to haul. Since 2018, FW has measured truckload volumes in relation to capacity through a proprietary index showing the number of truckload orders rejected during the prior week. Since 2018, the proportion of rejected loads has ranged from a low of 2.5% to a high of 30%. Rejected loads are low when there is overcapacity and high when there’s a shortage of trucking capacity. Currently, only 3.5% of loads were rejected, which is low by historical standards.
Trucking companies as well as single-truck operators reject a percentage of loads every day for a variety of reasons in response to orders from shippers of all kinds — retailers, manufacturers and industrial firms. FW’s data is focused on the overall trucking market, not what takes place at individual companies. The article does acknowledge that bankruptcies, closures and downsizings have been occurring across the industry for more than a year and a half. Despite these changes which would seem to remove excess capacity from the market, overcapacity still remains the primary cause of the imbalance between freight and available trucks. FW concludes that, while freight volumes are more robust than would be expected had there been a sharp economic recession, the softness in freight is a capacity issue, not a demand issue. (Adapted from FreightWaves Daily)
Every year, TAT (formerly called Truckers Against Trafficking) honors a member of the trucking, bus or energy industry, whose direct actions help save or improve the lives of those exploited or prevent human trafficking from taking place, with the Harriet Tubman Award
Bob Costello has indicated that the freight market has improved – but very slowly – since January. It must be said that ATA’s indices are dominated by contract freight as opposed to spot rates.
Now, however, with Republican control of both houses of Congress and the White House (and, some say, the Supreme Court) I am optimistic that trucking will get a fairer shake than it has during Biden’s term in office.