Truckers across North America have struggled mightily as freight demand slowed over the past 12 months but some signs are emerging that the worst may soon be over.
According to the latest Bloomberg Intelligence/Truckstop survey, we may be sitting at the lows for spot truckload demand and rates. Demand expectations for the next three to six months have improved and the rate outlook is inching up. (On the Bloomberg Terminal, click here to read the full report.)
“While we don't believe we're out of the woods yet, the shift in sentiment is encouraging,” BI senior logistics analyst Lee Klaskow writes in the report. “Conditions should improve due to seasonal trends, coupled with higher-cost capacity being forced out of the market. Rates may get additional support as inventory levels return to more normal levels.”
Some highlights from the survey:
60% expect volumes to rise over the next three to six months — about 20 percentage points higher than the fourth-quarter 2022 poll
Soft demand was cited by 42% of respondents as the main reason for not buying equipment, followed by 32% citing higher costs
79% of respondents said the US is already in a recession or that one is just around the corner
Klaskow says there little consensus on when spot rates will bottom, with 29% of respondents expecting that to happen in the fourth quarter and another 28% thinking it already occurred last quarter.
“We believe spot rates will start showing improvement as early as the second quarter as the market rebalances, supporting firmer contract rates in” the second half of 2023, he says. A separate report recently showed freight shipments fell 4% in March from a year earlier, based on the Cass Freight Shipment Index. Demand continues to be weighed down by elevated inventory levels and a global economic slowdown, it showed.
This article originally appeared on Bloomberg