In its third-quarter market update, the OOIDA Foundation echoed its thoughts from its November report in that, for the most part, things are moving in a positive direction.
“The third quarter report is sort of a mixed bag,” said Andrew King, director of the OOIDA Foundation. “On one hand, the report highlights how rates are starting to rise from their trough, but on the other hand, it clearly shows that demand has yet to increase. While inventory levels continue to right size, which is a tailwind for freight, manufacturing activity remains soft, which is a headwind for freight. Nevertheless, it does appear that the market is headed in the right direction overall and is poised to make good on the prediction that the next upcycle will begin in the second quarter of 2025.”
Owner-operator
Truckload volumes have decreased, according to C.H. Robinson’s data. However, this has not affected the routing guide depth.
“We are raising the bar, even in a historically prolonged freight recession,” said Dave Bozeman, president and CEO of C.H. Robinson.
Truckload price moved into positive territory for the first time since the second quarter of 2022. The Foundation market report forecasts truckload cost will move into positive territory in the fourth quarter of 2024.
Leased-on owner-operator
Soft freight market elements, including low demand, weak manufacturing and too much capacity, have carried over from 2023 into 2024.
The number of loads is 17% lower than in 2019, according to Landstar’s loads-per-quarter data.
Landstar’s BCO providers and truck counts also showed a positive shift in the market.
Company driver
Inventory-to-sale ratios decreased year-over-year for the fourth consecutive year, a positive sign for the future of freight demand.
Employment for general freight decreased slightly quarter-over-quarter as the industry continues to downsize to meet demand.
Inflation-adjusted pay is just above what is was during the last downcycle in 2019.
Overall trucking
Consumers spending more on services at the expense of goods purchased are among the factors resulting in declining freight levels.
“Manufacturing activity is a large driver of truck freight,” U.S. Bank said in its Spend Index. “Much of the softness in the third quarter was in durable goods or items with a usable life of at least three years.”
Shippers experienced an abundance of capacity compared to the amount of freight shipped.
Overall freight
The utilization rate for all manufacturing sectors declined, as did hours of operation.
Inefficient supply levels fell quarter-over-quarter, and insufficient orders were higher. Additionally, sufficient inventories were lower for the third time in the past four quarters.
The Foundation’s complete quarterly market update is available on its website. LL
More Land Line news.
Credit: Source link
