Operating authorities
Small operators have borne the brunt in 2023, and analysts blame bad spot rates and pricey fuel, but the losses have leaked to larger fleets of 100 trucks or more. However, this hasn’t yet put much of a dent in the huge 2020-2022 carrier surge. The tumbling freight spot market and historically high fuel prices are teaming up to push more small fleets. Watching “revocations” of operating authorities with the Federal Motor Carrier Safety Administration indicates how volatile the trucking business has been since COVID-19 transformed the industry.
Spot rates are down about 70 cents per mile from a year ago in trucking segments dry van, refrigerated (reefer), and flatbed. As COVID shut down jobs and stimulus money entered into the economy, demand increased for all kinds of goods. Trucking responded with record growth of new trucking businesses in response to that demand, which is now cooling off. The picture for 2023 so far isn’t all negative. That almost unbroken period of fuel-price drops has helped soften the blow of lower spot rates, but the decline in spot rates is a bigger factor. Big change in spot rates has a far bigger effect on the health of a carrier than diesel prices. We’re not likely to see any further decline. We probably have seen the bottom, certainly in refrigerated.
Dry van may have bottomed out, and flatbed is still strong. Operators, load boards, and trucking stakeholders have been looking for light at the end of the tunnel for several months. That volume still suffers and spot rates are trying to fight off their doldrums. The money shouts, however, when viewed from the viewpoint of shrinking per-mile margins, especially compared to a year ago.
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