Rate recovery

If supply falls further and peak season brings a bump there will be ‘an opportunity for rate recovery. Even possibly robust fourth quarter’ of 2023. The trucking sector is likely to see a measured recovery from its current downturn rather than a quick snap back. Spot rates have been flat—and “scraping the bottom”—for nearly two months. Showing that there will be no V-shaped freight recovery in 2023.

It is expected revenue per ton-mile for the first half of this year to be down between 3% and 6% compared to the first six months of 2023. There’s been a slight seasonal uptick, Leathers said, “but nothing to get too excited about” and pricing on both the spot and contract markets hasn’t yet meaningfully improved. Total spot-market rates for the week ended June 2 were almost 22% below the same 2022 week and 0.1% below the five-year average.

A key to proper recovery might be a continued dwindling of supply. The sector has recorded net license deactivations 36 weeks in a row—throughout the summer. If that’s coupled with a possible inflection point around the beginning of peak season will have a solid chance to prosper in the second half of 2023. It sets up an opportunity for a more normalized or even possibly robust fourth quarter. Activity appears to be near a bottom as that price leverage remains with shippers. The seeds have been sown for a rebalancing between supply and demand.

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