Freight Market Gears Up for Modest Growth in 2024

Last updated: November 19, 2023

The freight market, which saw a boom during the COVID-19 pandemic, is now in a sluggish phase due to economic factors like rising interest rates, inflation, and a drop in consumer spending.

Freight trucks lined up

However, industry experts predict a slow but steady rebound starting from the first quarter of next year.

Avery Vise, vice president of trucking at FTR Transportation Intelligence, shared his insights at a recent regional meeting of the Transportation Intermediaries Association.

“GDP goods transport sector, that’s pretty ugly. It’s getting less ugly, I guess is the best spin to put on it,” Vise said.

He described the current and future growth as “modest” and “stagnant,” suggesting that a significant freight growth or a substantial loss of capacity or drivers could speed up the recovery.

The industry has lost 138,000 drivers in the first seven months of this year and roughly 280,000 from July 2022 to July this year.

Despite this, Vise noted that the larger carriers have been picking up the lost capacity as the overall freight market remains stagnant.

Vise also highlighted that the loss in capacity isn’t reflected in the Bureau of Labor Statistics data, which shows a more stable market.

This discrepancy is due to the data representing all employees in the sector, not just drivers, and many carriers being sole proprietors.

The industry has seen about 20 carriers with 101 or more trucks go out of business in the first seven months of 2021 and 2022, and 49 in the same period this year.

Vise pointed out that it’s not just small carriers that are closing shop, but larger ones too.

Despite the challenges, Vise remains optimistic about the future. He expects rates to go up, albeit not dramatically until 2025.

“We’re still well above the levels in 2018, which was the highest we’ve ever seen before. That’s good for carriers,” he said. However, he also noted that carrier costs have significantly increased, with equipment costs and driver pay being higher.

Vise concluded that the overall volume is deficient, with sectors like the flatbed, short-haul, dump, and bulk driving rates down across the industry.

However, he also noted that volume and rates in dry van and refrigerated are not as bad compared to 2019. “Our outlook right now is really pretty flat, not just for this year but for next year as well,” he said.

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