A survey of owner-operators and small fleets conducted in the fourth quarter of 2023 shows that most respondents believe that current trucking freight demand has reached its bottom, according to research from Truckstop and Bloomberg Intelligence.
“The worst may be near for the North American truckload spot market,” Lee Klaskow, senior freight transportation and logistics analyst at Bloomberg Intelligence, said in a release. “Capacity could drop as rates hover near or below operating costs, which is crucial for the spot market to reach equilibrium.”
The survey included replies from 148 respondents, consisting of dry-van, flatbed, temperature-controlled and specialized/diversified, hot-shot and step-deck carriers. Of the respondents, 52% operate just one tractor.
Specifically, the Bloomberg / Truckstop 4Q23 Truckload Survey shows:
Those results echo another trucking sector report, as the transportation analyst group FTR said that its Trucking Conditions Index for December fell to a reading of -4.31 from -1.35 in November.
Although December’s TCI was weaker than November’s index, it otherwise indicated the least negative overall market conditions for carriers since May. Causes for the continued negative trucking climate includes a higher cost of capital and a deterioration in freight rates, FTR said. And those conditions are expected to continue, as FTR’s outlook remains below neutral market conditions through 2024.
One silver lining to the slump is that it may squeeze excess capacity out of the sector, trading short term pain for long term gain, but that turnover will still take time. “We finally see indications that larger carriers are no longer absorbing the bulk of driver capacity displaced by failing small carriers, suggesting a steady tightening of capacity that eventually could spark a turn in the market,” Avery Vise, FTR’s vice president of trucking, said in a release. “If the recent upturn in diesel prices continues, the capacity drain among small carriers might accelerate. Even so, the industry will need stronger freight demand, and we still don’t see any significant inflection in volume until at least the second half of this year.”
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