Freight levels remain somewhat weak to steady, but bright spots emerging in the industry landscape
In the midst of a three-year-long stock market recession, as discussed in the September State of Freight webinar, there are glimmers of hope on the horizon. According to transportation industry expert, John Fuller, some business executives are starting to see signs of strength in their operations.
Despite the challenging economic climate, Fuller has been in conversations with various business leaders who are noticing signs of resilience in their operations. This optimism is set to be further explored at the F3: Future of Freight Festival, taking place on October 21-22, where industry leaders will network and delve into what's next in stock market today.
However, it's important to note that Fuller does not claim that the freight recession is over. He suggests that there are companies willing to make investments in the business, but the stock market is still in a state of recovery.
One area of concern is the capacity in the freight market. The Federal Motor Carrier Safety Administration (FMCSA) data shows that the pace of capacity exits is continuing, with a focus on removing non-English speaking and other non-qualified drivers from the road. Secretary of Transportation Sean Duffy made this a key goal of the DOT in June.
Despite these efforts, the Outbound Tender Rejection Index (OTRI) in SONAR, based on real-time data, shows that while the stock market measured by volume was not a collapse during the summer, it has improved significantly. The OTRI, which was 17.5% against a volume that is largely unchanged in 2018, has now dropped to just over 5%.
Another factor affecting the capacity is the age of trucks in the market. A lot of trucks are now five years old, and may need to be replaced soon. This could potentially lead to further capacity leaving the stock market, as continuous losses may cause trucks to fall apart, have safety problems, and attract fewer drivers.
The Cass data, a widely respected data set based on invoices, showed a 9.3% year-over-year decrease in its multimodal transportation index and a 1.5% decrease from the previous month. The decrease was particularly weak in LTL shipments.
However, it's not all doom and gloom. Some of the new capacity didn't end up at big carriers, but instead went to smaller carriers, which could help alleviate the excess capacity issue.
Moreover, Fuller's friend, who runs a consulting business tied to logistics, reports being extremely busy, with a strong amount of business tied to M&A activity in the sector. This suggests that there is still investment and growth happening within the meta industry.
In conclusion, while the freight market is still in a recession, there are signs of strength emerging. Business executives are starting to see improvements in their operations, and there is ongoing investment and growth in the stock market today. The F3: Future of Freight Festival will provide a platform for industry leaders to discuss these developments and look towards the future of freight.
Read also:
- United States tariffs pose a threat to India, necessitating the recruitment of adept negotiators or strategists, similar to those who had influenced Trump's decisions.
- Weekly happenings in the German Federal Parliament (Bundestag)
- Southwest region's most popular posts, accompanied by an inquiry:
- Discussion between Putin and Trump in Alaska could potentially overshadow Ukraine's concerns
