In its first quarterly report of 2024, the OOIDA Foundation said a freight upcycle should not be expected anytime this year despite rates appearing to have found a floor.
The second quarter of 2025 is likely for that upcycle, as rates will not rebound until demand increases.
Owner-operator outlook
Truckload volumes have increased for three consecutive quarters, but remain in negative territory putting downward pressure on rates. However, they are close to crossing into positive territory.
C.H. Robinson’s President and CEO, Dave Bozeman, said the company outpaced the market indices for the third quarter in a row.
Truckload revenue increased quarter-over-quarter while revenues are down compared to last year and 26% below 2019 levels.
Truckload price and cost have been in negative territory since the second quarter of 2022.
Leased-on owner-operator outlook
The number of loads hauled via truck through the first quarter of 2024 performed higher than expected, according to Landstar President and CEO Jim Gattoni.
Yet, the same soft freight market fundamentals, such as low demand, weak manufacturing and too much capacity, that occurred during 2023, continue in 2024.
Loads are down quarter-over-quarter, year-over-year and 13% lower than 2019.
Trucks provided declined 4% quarter-over-quarter and has now decreased for seven straight quarters. The number of trucks provided is a good barometer for where the freight market is for the leased-on owner-operator.
The soft macro-freight environment experienced throughout 2023 has continued into the first quarter of 2024. Although capacity is still exiting the industry, revenues per load have yet to tick upward. Some parts of the market appear to be moving towards equilibrium.
Company driver outlook
Sales decreased for the first time in two quarters but increased year-over-year. This could be a positive signal for future freight demand.
Employment for the general freight, long-distance and truckload sector decreased quarter-over-quarter as the industry downsizes to meet weaker demand.
Average weekly earnings, including more than just drivers, increased in the first quarter.
Overall trucking industry
According to U.S. Bank, the truck freight market continued to underperform the broader economy during the first quarter of 2024. Several factors contributed to declining freight levels, including bad winter weather and low household goods consumption.
U.S. Bank’s Spend Index contracted for the seventh consecutive quarter, much of which is due to the price of diesel. However, it’s not the sole reason for a reduction in spending, U.S. Bank said.
The bottom line is that shippers had too much capacity for too little freight in the first quarter.
Overall freight market
The Producer Price Index moved downward and rates appear to have finally found their floor. Unfortunately, rates will continue to bounce along the bottom of the trough until demand increases enough to ignite the next upcycle. LL
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