In the midst of the current freight recession, the trucking industry is experiencing significant shifts. As the US freight recession persists, it's crucial for trucking companies and owner operators to stay informed and adapt. The FMCSA reports a worrying trend - while carriers are leaving the industry, fewer new MCs are starting up. In fact, new carrier starts have declined by over 7% in July alone, contributing to a year-to-date decline of 29%.
'Motive,' an industry expert, highlights a startling trend - carriers with 6 or more trucks have seen departures increase by 12% to 17% in July. This exodus trend is set to continue, spelling out challenges for the industry. Yet, challenges often pave the way for opportunities. Historically, such contractions have led to higher rates.
DAT Trendlines' data doesn't paint a rosy picture either. Spot postings have dropped by 19.5% in July compared to June, plummeting a staggering 50.3% from July 2022. The result? A scenario where trucks are outweighing available freight.
Despite these declines, reefer and flatbed tender volumes have hit record highs for July. The data speaks to the complexity of the current situation. Cass Information Systems reports a widespread decline in the industry, with the current downcycle already spanning 19 months.
Considering historical trends, the fact that the last three downcycles have each spanned between 21 and 28 months offers insights. This implies that the current downcycle could potentially end or begin to taper off sometime between October 2023 and May 2024.
With new trucks hitting the market, the hope is for an increase in freight levels, but uncertainty looms. Truck visits to top-50 retailer warehouses have decreased by 15% in July. As the freight recession is projected to linger through 2023, the manufacturing contraction contrasts with a robust consumer.
However, there's room for cautious optimism. ACT Research suggests that demand fundamentals could improve soon. While we seem to be bouncing along the bottom, it's unlikely things will deteriorate further, at least in the short term.
Here's the advice for trucking companies navigating these challenging times: operate efficiently and conserve cash. Carriers armed with a solid business plan will likely weather the storm more effectively than those without. It's time for strategic thinking, resourceful management, and a focus on the long game.
In this climate of uncertainty, we're here to keep you informed. Subscribe to our channel to stay updated on industry trends, insights, and strategies. Let's navigate the freight recession together and emerge stronger on the other side.
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24 авг 2024
