Rebalancing. That’s the word being tossed around by trucking industry analysts and economists when discussing the current freight volumes and market. The term applies to the cyclical dance between the shippers who provide the freight and the trucking industry that hauls it.
There are too many trucks for the available freight. The competition for loads is very high. Fuel prices are transitioning from an inflationary factor to a deflationary one as we pass the anniversary of the fuel price spikes that followed Russia’s invasion of Ukraine. Soft real retail sales trends and ongoing destocking remain the primary headwinds to freight volumes, and sharp import declines suggest this type of environment will persist for some time.
Destocking is the process retailers use to match inventory levels to current sales rates. If a retailer is selling less of a product, it needs a smaller inventory to support sales. When consumers aren’t buying, retailers don’t order replacements — and shipment numbers drop. While contract rates are falling, they haven’t yet fallen to spot rate levels, as truckers who depend on brokered freight can readily attest. The solution to lower rates is in the “rebalancing” mentioned at the beginning of this article.
For rates to rise, shipment numbers must come up. The pendulum of pricing power has been firmly with shippers for some time, and the cudgel of lower rates is starting to impact capacity. Though new equipment production remains elevated, hiring and fleet exit trends tell us capacity is slowing at the margin. Most of the experts are looking to the third quarter for the freight recession to end.
ALL FREIGHT DISPATCH
Tired of looking for loads and you have a semi truck?
WE KNOW THAT EVERY 1% IN SAVINGS MEANS A LOT TO A TRUCKING COMPANY!
Our professional team will save you all of your troubles. We charge only 5% or less and we take care for the following:
Loads search, negotiate best rates, calculate hours, set-up packets, request detentions/layovers.
We will send weekly reports which include all empty miles, loaded miles, revenue, and rate per mile for each week.
Do not hesitate to reach us via email: Info@Allfreightdispatch.com or feel free to contact us at:888-404-5045