There were mixed signals coming from various economic indicators, reports Truck News. Motive reported a notable spike in truck visits to retail facilities, signaling bloated inventories have finally been depleted and restocking efforts have commenced.
The spot market improved on both sides of the border, but in the U.S. refrigerated haulers were the main benefactors with the Thanksgiving holiday looming. But ACT Research notes a full recovery will take time. More capacity must leave the industry and robust Class 8 truck order activity is a cause for concern as the last thing needed in this environment is more trucks!
“It’s likely that instead of indicating overall higher demand, large retailers are returning to more normal inventory management,” Motive reports. “They’re bringing in more stock as the holidays approach compared to the tighter stocking windows we’ve seen this year. Overall, we maintain our prediction that November will see retail visits exceed those from 2022.”
Motive’s report also reflected a continued exodus of capacity from the market, while new registrations in the U.S. hit their lowest level since June 2020. In October, 3,168 carriers left the business in the U.S., while registrations for new carriers fell 7.5% from September to the lowest mark of 2023.
Truckstop and FTR Transportation Intelligence reported that, for the week ended Nov. 3, overall broker-posted spot rates rose for just the second time since the end of August. This was thanks to those stronger reefer rates, which offset small declines in van and flatbed segments.
The news was also positive in the Canadian spot market in September. Loadlink Technologies reported freight volumes on its network were up, and truck postings down. It is the first time since December 2022 and January 2023 that we’ve seen two consecutive months of increased load volumes.
However, ACT Research reports in its Freight Forecast, U.S. Rate and Volume Outlook report that freight conditions will take some time to improve.
“We continue to expect the freight cycle to turn once capacity tightens, but early signs of 2024 equipment production suggest that may be a while,” said Tim Denoyer, ACT’s vice-president and senior analyst.
“The trucking industry has broadly reached an uncomfortable equilibrium with spot rates steady for several months now. Net fleet exits, which have been going on for a year, are worsening, and although equipment demand at larger fleets remains fairly robust, there are signs that lower new equipment demand will lead to a tighter freight market over the course of 2024.
The freight recession was a hot topic of conversation at the Truckload Carriers Associations’ Bridging Border Barriers event in Mississauga.
James Menzies of Truck News covered the event and reports David Tumber, COO of Kriska Transportation Group summing up the current realities of the freight market.
“To say it’s a challenge to grow the top line might be an understatement in this environment. Eighteen months ago, two years ago, we were moving freight at a rate per mile that was exponentially higher than pre-pandemic … Fast-forward to where we are today and it’s obviously a different environment.
“I think it makes it difficult to achieve organic growth. Does that mean we stop trying? Of course not. There are opportunities to grow share with our existing customer base. There are opportunities with existing customers to renegotiate, to extend existing agreements, to take certain lanes off RFQs. It comes down to the relationships you have.”
Full story here.