Home Truck News Slow and steady recovery in store for truckers: FTR - Truck News

Slow and steady recovery in store for truckers: FTR – Truck News

It’s a mixed picture for the trucking market, with no immediate end to a soft rate environment in the near-term but gradually improving conditions.

That was the message from Avery Vise, vice-president of trucking for industry forecaster FTR, when providing a freight market outlook at the company’s annual conference. Carriers saw a larger year over year decrease in revenues in the second quarter of this year compared to even Q2 2020 when the pandemic crushed freight volumes.

car plant
A looming automotive strike could be the next blow for truck freight. (Photo: iStock)

“But revenues are still very high relative to where they were before the pandemic,” Vise said.

There have been about 55,000 carrier authority revocations in the first seven months of this year, mainly of the one- or two-truck varieties but increasingly affecting fleets with 100 or more trucks.

“Yes, it’s primarily a small carrier issue but there has been a contagion. It has spread and has become a significant factor,” Vise said.

Active truck utilization, FTR’s barometer for tightness in the market, has likely bottomed out and should recover at a “fairly stable and gradual level,” but not reaching its 10-year average until the end of 2024.

When it comes to rates, Vise said the spot market is down about 4-5% year over year, but have bottomed out. “We see steady improvement turning positive year over year by the second quarter of next year,” Vise said, “but still not much stronger than what we saw in 2019 until we get to the end of next year.”

Year over year comparisons for contract rates are “ugly” and “going to be ugly for carriers for quite a while.”

Vise said it will be mid-2024 before those year over year comparisons turn positive, with no real strength to speak of until 2025. Rates remain above 2018 levels but that doesn’t take into account rising equipment and driver wage costs.

The outlook for dry van truck loadings is flat, with refrigerated loads likely to see some growth as it follows population and job growth. Flatbed loadings are expected to struggle.

Looking ahead, Vise warned a potential UAW strike at the major automotive plans could further deteriorate freight conditions.

Ton-miles – a metric that takes into account not only loadings, but also distance traveled – is on pace to be down 0.8% this year.

“We estimate ton-miles per active Class 8 vehicle is quite weak still, and not going up very much from where we are,” said Vise. This is because there are more seated trucks out there hauling the same amount of freight.

“The reality is, we’re not getting the kind of productivity out of the equipment that we’re accustomed to,” he said.

But if you’re looking for good news, Vise offered this: “We are not going to see an especially robust environment for truckload rates, but on the other hand we’re not going to see truckload rates collapse any more than they have.”

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