State of Freight for December: Freight Economy Due for ‘Directional’ Change
During FreightWaves’ recent webinar for December, Craig Fuller, FreightWaves CEO, and Zach Strickland, SONAR Director of Freight Market Intelligence, shared insights suggesting that the freight marketplace is looking less uncertain than it has been in previous years.
Overview
Last month, Strickland and Fuller declared that the Great Freight Recession is officially over, backed by SONAR data showing rising tender rejection rates and spot rates. Fuller stated, "When you start talking about the directional change … declaring the freight recession is over, if it’s truly data driven from credible sources, people do start to factor that in."
Here are the key takeaways from this insightful session:
Key Takeaways
The Freight Recession is Over, but Market Speed of Improvement is Unclear
Both Fuller and Strickland noted that though the freight recession, lasting over two and a half years, is over, market recovery to pre-pandemic levels will take time. “The market has been improving since last May and continues to get better,” said Fuller. However, the pace of improvement remains uncertain.
SONAR’s Outbound Tender Rejection Index indicates favorable trends. Strickland noted, "With the current upward trajectory, we are seeing promising signs compared to previous years."
Spot Rates Are Up 16% Year-Over-Year
Data from SONAR’s National Truckload Index shows spot rates at $2.49 per mile, marking a 16.2% increase year-over-year compared to 2023. Strickland highlights how the influence of fuel costs has been pivotal, suggesting that without a 20% drop in average diesel costs, spot rates could be even higher.
Rising Long Haul Intermodal Rail Volumes
Despite seasonal expectations for a slowdown, long haul rail intermodal volumes are on the rise for both international and domestic size containers. Fuller explains that shippers are using rails as warehouses on wheels, given the current import levels and the strategic delay in inventory needs.
U.S. Manufacturing Sector Yet to Rebound
November’s data show U.S. manufacturing in ongoing contraction, though at a slowed pace. Fuller addresses how challenges within the aerospace and automotive sectors are influencing broader manufacturing sluggishness.
Launching a Playbook for Small Fleet Owners
FreightWaves is set to launch a strategic playbook for small fleet owners by Valentine’s Day, offering resources and insights to help them bolster their businesses. This collaboration with Adam Wingfield aims to build a community of small carriers equipped with the tools and knowledge to thrive in the current market climate.
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This post was adapted from content originally published by FreightWaves.