US Trucking Industry Anticipates Freight Demand: U.S. trucking industry insiders and market analysts expect freight demand to rise in the second half of the year. This will help the industry recover from falling profits and flat package volumes in recent quarters. This will help the industry recover from two quarters of declining profits and flat package shipments. After these trends hurt the industry, this will help it recover.
Target and Macy’s optimism about the future drives this expected rise. These business owners believe they have solved their inventory problem from last year. They need enough supplies because they’ll shop a lot for the holidays.
The National Retail Federation says the number of big containers processed at U.S. ports will be similar to last year. Compare how many containers were handled. This is a big change from last year. This suggests that retailers are stocking up because they expect customers to spend more as the year ends.
XPO Chief Mario Harik said this. He said “the nadir of freight demand seems to have passed,” and a market recovery could last until 2024. “The bottom of freight demand seems to have been reached,” he said.
Starting in July, XPO, which works with Ulta Beauty, saw a change in shipment volume and weight. XPO provides these services. In the company’s most recent earnings call, Old Dominion Freight Line’s CFO, Adam Satterfield, said inventory was stabilizing.
Also Read: Yellow Bankruptcy: Impact on US Freight Trucking Industry and Supply Chain
The pandemic and inflation that followed changed consumer habits and made household budgets stretch as far as they could, hurting the trucking industry for a long time. The trucking industry is struggling due to these two factors. The industry’s issues were clearly stated by Knight-Swift Transportation CEO David Jackson. He lamented the company’s profits, saying, “I’ve never seen a drop in demand without a drop in the economy.”
The second-quarter financial results also indicate a bleak industry future. Industry leaders like JB Hunt, Old Dominion Freight Line, CH Robinson, and XPO saw their adjusted net income drop 22% to 69% from year to year. It was a trend across the industry. Analysts said “the quarter was a bad time for trucking companies,” citing rising wages and low spot rates. All analysts agreed that the trucking industry has struggled in the past three months.
However, ACT Research’s Tim Denoyer was cautiously optimistic. “The downward cycle hasn’t hit its lowest point yet, but there are signs of growth,” he said. “The cycle won’t bottom out for a while.” Knight-Swift expects the freight market to rebalance, improving pricing. This is due to more imports and fewer supplies.
The recent bankruptcy of Yellow Corp, the third-largest US trucking company, supports this view. Experts believe the company’s departure could boost rates for XPO, FedEx Freight, and Old Dominion without their knowledge. The American trucking industry may be waking up after a long sleep as retailers restock in many categories. This would benefit business.
Our Reader’s Queries
What is the trucking freight forecast for 2023?
According to the ATA Freight Transportation Forecast 2023 to 2034, the trucking industry is expected to see a significant increase in tonnage. The report estimates that overall truck tonnage will grow from 11.3 billion tons this year to 14.2 billion tons in 2034. This represents a substantial portion of the freight tonnage, accounting for 72.4% in 2023 and 72.6% at the end of the forecast period.
Is the trucking industry in high demand?
Despite being a recurring issue, the trucking industry is still struggling to recruit new drivers from the younger generation. According to the American Trucking Associations (ATA), there will be a shortage of over 60,000 drivers by 2023, which is expected to increase to 82,000 by 2024. This presents a significant challenge for the industry, which must find new ways to attract and retain drivers in order to meet the growing demand for transportation services.
What is the biggest issue with the trucking industry in the United States?
This year, ATRI surveyed over 4,000 transportation stakeholders to identify the top five issues in the industry. Truck parking, fuel prices, driver shortage, and driver pay were among the top concerns. Interestingly, zero-emission vehicles made their debut on the list as well. As the industry continues to evolve, it’s important to stay informed and address these critical issues head-on.
What is the trucking industry forecast for 2024?
According to ACT Research analysts, the freight economy is expected to see an improvement in 2024. However, the demand for freight will remain soft for the rest of the winter. The research firm predicts that for-hire volume growth will make a comeback as overall fleet growth fades, most likely in the second quarter of 2024.