More challenges on the road ahead.
That seems to be the prevailing concern amongst owner-operators following a survey conducted by Truckstop and Bloomberg Intelligence.
It indicated that the industry has noted that with the moderating economic activity and normalizing of supply chains, there is now a lower need for capacity, which is driving the outlook for rates and demand lower.
This has carriers worried about high costs, and the ability to turn a profit.
“Sentiment among survey respondents in the spot truckload market has turned significantly more bearish, according to survey respondents, about the prospects for demand and rates growth,” explained Lee Klaskow, senior freight transportation and logistics analyst at Bloomberg Intelligence. “Current spot conditions may likely force a rebalancing, forcing higher-cost carriers to reassess their operations.”
Results from the 3Q22 Truckload Survey:
- Pessimism among carriers has touched the pandemic lows seen in 1Q20: About 33 percent of respondents expect load growth to decline over the next six months, the lowest reading since 1Q20 and significantly higher than 3Q21 at nine percent. Many carriers raised concerns over the strength of the upcoming peak season. Refrigerator carriers were the most optimistic, with only 10 percent of those surveyed projecting a volume decline in the coming months.
- Spot rates decline, impacting carrier sentiment: Spot rates excluding fuel surcharges have fallen by 31 percent since peaking in late December of 2021, which has negatively impacted carrier sentiment. Only 26 percent of carriers expect the rates to rise in the next six months, the lowest level since 1Q20. About 38 percent of carriers surveyed expect a drop over the next three to six months.
- Total demand has taken a turn downward in 3Q: 74 percent of respondents noticed a drop from 2Q2022, and about 57 percent said volume growth was down from a year earlier. The typical carrier reported an average decline of 30 percent in the number of loads available which is in line with the 37 percent drop in Truckstop’s Spot Market Demand Index.
“The most important thing to Truckstop is that we continue to provide the tools and resources our customers need to keep their businesses moving forward, regardless of market conditions,” said Kendra Tucker, the Chief Executive Officer of Truckstop. “Our platform and solutions help carriers perform the critical day-to-day functions needed to help ensure they can weather these types of market fluctuations and remain profitable.”
There were 128 respondents to the survey, consisting of dry-van, flatbed, temperature-controlled, and specialized/diversified carriers. Of the respondents, 64 percent operate just one tractor.
Bloomberg Intelligence is an independent perspective providing interactive data and research across industries and global markets, plus insights into company fundamentals. More information may be found at www.bloomberg.com/professional/product/bloomberg-intelligence/.
Truckstop is a partner in freight rates, data, negotiation tools, and load board solutions, and is headquartered in New Plymouth, Idaho. Company information is available at www.truckstop.com.