HIGH POINT – Trucking demand has fallen to levels not seen since the “near freight recession” of May and June 2020, when lockdowns were just beginning.
Bank of America, which tracks and analyzes shippers’ views of demand through its proprietary Truckload Demand Indicator, says volumes are down 23% year-over-year and at a 22-month low.
In a note to investors, Bank of America’s trucking research managing director Ken Hoexler said that shippers believe that rates have “melted down.” BofA’s data comes from a survey of 44 shippers representing industries including retail, manufacturing and consumer goods.
On the optimistic side however, shippers are finding it increasingly easy to move loads and achieve capacity, with capacity hitting highest levels since June 2020.
BofA gave some anecdotal support in its report. One food shipper said it was receiving more cold calls from freight brokers rather than those brokers having to seek capacity for shipments on their own. A shipper that moves home building products said flatbed capacity is loosening a bit but is still tight. A wood products company said rates were beginning to ease as truck capacity opened up.
An April 13 report from the Wall Street Journal also indicates a downturn, which noted that rates on trucking’s spot market have begun falling.
“I think it’s fair to say that the days of expecting rate increases are pretty much over,” Avery Vise, a trucking analyst at FTR Transportation Intelligence, told The Wall Street Journal. “It’s a question of just how quickly things are going to normalize. The idea that you can just sort of print money is over.”
In a webinar earlier this month, XPO Logistics CEO Brad Jacobs also provided some data points that show demand is easing and capacity is improving:
Load truck rates, or how many shipments there are for every truck, are down to four-to-one from 11-to-one a month ago. That means an average of four shipments are now looking for a truck.
Tender rejection rates, the percentage of electronic and contracted loads rejected by carriers, are down 11% year-over-year and down 4% from a few months ago.
Applications for driver jobs are up significantly, but there’s still a severe labor shortage.
This article originally appeared on Furniture Today