Slowing economic activity and correcting supply chains have reduced the need for capacity and are driving the outlook for rates and demand lower, leaving higher-cost carriers worried about turning profits, according to the latest Bloomberg Intelligence-Truckstop survey of owner-operators.
“Sentiment among survey respondents in the spot truckload market has turned significantly more bearish, according to survey respondents, about the prospects for demand and rates growth,” said Lee Klaskow, senior freight transportation and logistics analyst at Bloomberg Intelligence. “Current spot conditions may likely force a rebalancing, forcing higher-cost carriers to reassess their operations.”
See also: Spot rates continue slide in August despite stronger volume
The Bloomberg and Truckstop third-quarter 2022 survey also shows this outlook:
- Pessimism among carriers has touched the pandemic lows seen more than two years ago, in the first quarter of 2020: About 33% of respondents expect load growth to decline over the next six months, the lowest reading since 1Q 2020 and significantly higher than 3Q 2021 at 9%. Many carriers raised concerns over the strength of the upcoming peak season. Refrigerator carriers were the most optimistic, with only 10% of those surveyed projecting a volume decline in the coming months.
- Spot rates decline, impacting carrier sentiment: Spot rates—on which many owner-operators and small carriers depend—excluding fuel surcharges have fallen 31% since peaking late last December, which has harmed carrier sentiment. Only 26% of carriers expect the rates to rise in the next six months, the lowest level since 1Q 2020. About 38% of carriers expect a drop over the next three to six months.
- Total demand turned down in 3Q 2022: 74% of respondents noticed a drop from 2Q and about 57% said volume growth was down from a year earlier. The typical carrier reported an average decline of 30% in the number of loads available, which is in line with the 37% drop in Truckstop’s Spot Market Demand Index.
See also: Smaller carriers face more risk as fuel prices resume rise
“The most important thing to Truckstop is that we continue to provide the tools and resources our customers need to keep their businesses moving forward, regardless of market conditions,” Truckstop CEO Kendra Tucker said. “Our platform and solutions help carriers perform the critical day-to-day functions needed to help ensure they can weather these types of market fluctuations and remain profitable.”
The Bloomberg-Truckstop survey of owner-operators and small fleets provides channel checks into the health of the spot market. The sample size was 128, consistings of dry van, flatbed, temperature-controlled and specialized/diversified carriers. Of the respondents, 64% operate just one tractor.
