Is the Freight Recession Finally on the Upswing?
The latest State of Freight data confirms what we’ve been feeling on the ground: the recession may officially be in the rearview mirror. A “perfect storm” of demand is building. Whether you are an owner-operator running regional routes or a fleet manager with hundreds of long-haul assets, the market is finally moving in the right direction.
Zach Strickland, Head of Freight Market Intelligence, studied these trends and noted this: “April has been… just kind of a sideline. It’s not up and to the right the way we saw it in March.” freightwaves.com
Graph from freightwaves.com
Truckload volumes are up double digits year-over-year, and trends are predicting a swift comeback this summer as multiple industries drive demand back up: produce, construction, and most of all, industrial production. Historically, the three industries come together to create the biggest month of the year for freight in June.
The SONAR Truckload Rejection Index primarily tracks contract freight in stable, long-term agreements rather than the volatile spot market. This Index’s rise shows that the industry’s backbone is strengthening. For your customers, this means more consistent volumes and a more predictable business environment compared to the recent past.
“Demand has gotten stronger… and we’re seasonally about to go into a much stronger demand cycle,” said Strickland. freightwaves.com
Why the Summer Heat is Bringing Higher Rates
For the past two years, the industry has experienced a freight recession in which supply has outpaced demand. Many factors are playing into this change, especially the DOT’s recent directive to tighten regulations for drivers. As demand continues to outpace the number of available trucks, carriers will regain pricing power, leading to a shift in market dynamics. For you, that means one thing: Pricing power is coming back to the carrier. From van and reefer to flatbed and vocational, the “air gap” in demand has vanished.
Trucks move the vast majority of domestic goods; this surge is a green light for the broader economy. This also suggests that consumer demand is high and industrial production is increasing, which could mean more business opportunities.
The JX Perspective: Prepared for Any Haul
At JX, we’ve supported every corner of this industry for over 55 years. We know that a mega-fleet’s needs are different from a single-truck operator’s, but the goal is the same: stay on the road and stay profitable.
Don’t wait for a roadside failure to realize the market has turned. Whether you need to refresh your long-haul sleepers to keep drivers comfortable or get your day cabs through a rigorous preventative maintenance check before the summer rush, JX is ready to help you capitalize on the rebound.
Source: https://www.freightwaves.com/news/national-trucking-capacity-is-about-to-tighten-significantly
