The OOIDA Foundation has unveiled its quarterly update for the fourth quarter of 2023 as an adjunct to its regular market update, hinting at potential forthcoming shifts. Here’s a breakdown of key insights:
Overall Trucking Industry:
- The U.S. Bank Shipment Index indicated that spending fluctuations and a slowdown in economic activity significantly impacted the truck freight market.
- Despite experiencing its sixth consecutive quarter of contraction, this quarter saw the smallest reduction in three quarters.
- Volume declines outweighed spending declines, suggesting a reduction in freight capacity and maintaining elevated costs.
- Overall, the shipment index fell below the five-year trend, marking the sharpest year-over-year decline since 2019.
Owner-Operator Outlook:
- Truckload volumes saw a second consecutive quarterly increase but remained in negative territory, exerting downward pressure on rates.
- Net truckload revenue remained relatively stagnant quarter-over-quarter and decreased compared to the previous year, indicating that the next cycle may still be distant.
- C.H. Robinson, a major logistics platform, struggled to meet expectations amidst weak freight demand and surplus carrier capacity. The Foundation’s market report noted a correlation between C.H. Robinson’s margins and spot rates.
Leased-On Owner-Operator Outlook:
- Low demand, weak manufacturing, an atypical peak season, and excess capacity persisted in the fourth quarter.
- The number of loads hauled via truck showed a reasonably consistent trend with historical pre-pandemic patterns.
- However, the number of trucks provided declined for eight consecutive quarters and remained below the five-year trend, reflecting ongoing challenges.
Company Driver Outlook:
- Real wholesale trade sales, excluding petroleum, increased for the second consecutive quarter, potentially signaling positive future freight demand once inventories stabilize.
- Employment in the general-freight, long-distance truckload sector, representing OOIDA membership, decreased quarter-over-quarter, reflecting downsizing efforts to match weaker demand.
- This marked the first year-over-year decline since the first quarter of 2021, underscoring the industry’s overcapacity.
- Average weekly earnings declined in the fourth quarter, persisting in a downward trend since the second quarter of 2021, with inflation-adjusted pay remaining below 2019 levels by 2%.
For further details, the full OOIDA Foundation quarterly market report is available for review.
Source: Land Line
