The U.S. trucking industry has lost its swagger – demand and rates are still high, but tender rejections and pricing have trended downwards in recent weeks. In conjunction with soaring fuel costs, this is hurting small operators, above all.
After a strong run that propelled pricing to record levels, the trucking market has been losing momentum, prompting the question of whether a recession might be imminent.
Spot rates have retreated and tender rejections have fallen and, as a result, bank analysts have downgraded trucking stocks.
On average, dry van rates sank eight cents in the first quarter, continuing the downward trend into April, to end up over 5% lower than a year earlier. Tender rejection rates have fallen from 25.76% a year ago to 9.92%.
And now speculation has begun to mount about a recession: JP Morgan warned a freight recession was inevitable; Bank of America located trucking demand “near freight recession levels” last week. This could have ominous ramifications for the U.S. economy, for which the freight sector is often viewed as a bellwether.
Read more in an article from The Loadstar.