A recent survey conducted by Bloomberg and Truckstop.com has shed light on evolving sentiments among owner-operators and small fleet carriers. After grappling with subdued demand and low freight rates, many carriers are beginning to see signs of recovery. However, a notable portion is still contemplating leaving the industry altogether.
While optimism about future prospects has grown, Lee Klaskow, Senior Freight Transportation and Logistics Analyst at Bloomberg Intelligence, noted a higher number of carriers are planning to exit the industry compared to prior surveys. Klaskow indicated that a quicker pace of carrier exits could bring the trucking market closer to equilibrium sooner, potentially improving rates next year.
Uncertain Futures and Industry Exits
The survey highlights ongoing uncertainty. Around 15% of carriers expect to exit the industry within the next six months, up by 6 percentage points from Q2. The slow reduction in capacity continues to put pressure on the market. However, accelerating the exit of excess capacity could spur a rise in spot rates and enhance the rate environment in 2025.
“Carriers are optimistic that the toughest times are now behind them,” said Kendra Tucker, CEO of Truckstop.
Spot rates, which remained under considerable pressure in Q3—falling by an average of 17% (excluding fuel)—may soon see improvement. Increased positivity among carriers is evident as 29% now anticipate rate increases within the next three to six months, marking a 6% leap in optimism compared to three months ago.
Rate Recovery in Sight
There are already signs of impending rate adjustments among major carriers. Old Dominion Freight Line recently announced a general rate hike of 4.9%, set to take effect in December. Todd Polen, Vice President of Pricing Services, explained the increase was designed to offset rising costs tied to real estate, equipment upgrades, and employee benefits.
Publicly traded carriers echoed this optimistic outlook during third-quarter earnings calls. Werner Enterprises expressed similar expectations, with CEO Derek Leathers stating, “It is our expectation as we look into 2025 that the time for rates to be going up is upon us. The question is the magnitude, and I think it’s too early to tell.”
Knight-Swift Transportation CEO Adam Miller projected modest increases toward the latter stages of the bid season, potentially reaching high single-digit growth. “There’s still a long way to go to recapture margins and bring public companies back closer to their historical levels,” Miller said.
Covenant Logistics has been proactive in raising rates multiple times last quarter, with plans for further increases in 2025. “We’ll propose another 2-4% increase during the current bid season and an additional 2-3% in the second half of next year,” said CEO David Parker. “I think we’ve got relationships enough with our customers that we can be successful in getting some.”
Signs of a Balancing Market
Indicators suggest the trucking market may be nearing equilibrium. Truckstop’s Market Demand Index for North America rose by 13% year-over-year in Q3, marking the third consecutive quarter of improvement.
While carriers noted weaker shipment volumes in Q3—56% reported lower demand compared to last year—the sentiment for the future is shifting. Roughly 40% of surveyed carriers anticipate increased volumes over the next three to six months, a 7% jump from Q2.
This growing confidence may also boost capital investments, with 24% of carriers planning to purchase new equipment within the same timeframe. However, weak demand remains a concern, with 34% of respondents citing it as a barrier to acquiring new assets.
A Changing Landscape Moving Toward 2025
While challenges remain, carriers’ outlook is steadily improving. For those still navigating this turbulent environment, being prepared to adapt will be key. With demand recovery on the horizon and the potential for rising rates, carriers who can weather the storm now may find themselves in a more favorable market landscape as early as 2025.
Businesses and carriers alike will need to strategize for this transition, keeping an eye on key indicators to stay ahead of the curve.
Source: Commercial Carrier Journal
