Trucking Freight Cycle Hits Bottom, Signs of Improvement?

The trucking industry might finally be catching a break. Analysts say we've hit rock bottom in the freight cycle. Here's what's happening:

Dry van spot and contract rates improving in 2024

Monthly year-over-year percent changes over the past decade.

Market Bottoms Out

• FTR reports market has "bottomed out"
• Surge in new trucking and warehouse businesses
• Increase in new trucking authorities

Spot Rates Show Promise

• Dry van spot rates bottomed in April
• Contract rates expected to follow suit
• Jason Miller's spot market cycle indicator at 16% in July

Key Stats:

• 27 consecutive months of lower year-over-year dry van spot rates
• Typical down cycle: 19-22 months
• Current cycle: 6-8 months longer than average

What's Next?

Experts are cautiously optimistic. While as we can see from the data that better days are ahead, it has still been a long while since we have seen said days:

"I'd love to see it one month positive. I'd really love to see it two months positive." - Ken Adamo, DAT Chief of Analytics

And to follow up on this:

"Our current expectation of that favorable change likely extends into 2025." - Mike Gerdin, Heartland Express CEO

Market Indicators:

• New business applications up
• Trucking authority gains increasing
• Spot rates showing signs of recovery

Industry Impact:

• Bankruptcies across the sector
• Negative trucking authority stops persist
• Carriers facing dwindling profits

The Road Ahead

While the market is showing signs of improvement, a full recovery may take time. Experts suggest looking for:

• Sustained positive year-over-year growth
• A quarter of generally positive performance
• Contract rates catching up to spot rates

The trucking industry has weathered a longer-than-average downturn, but signs point to a potential turnaround. Keep an eye on these trends as the market navigates its way back to growth.

Source: Trucking Dive