• ITVI.USA
    9,157.620
    -27.560
    -0.3%
  • OTRI.USA
    2.590
    -0.020
    -0.8%
  • OTVI.USA
    9,162.320
    -26.570
    -0.3%
  • TLT.USA
    2.670
    -0.010
    -0.4%
  • TSTOPVRPM.DALLAX
    1.230
    -0.070
    -5.4%
  • TSTOPVRPM.PHLCHI
    1.100
    -0.030
    -2.7%
  • TSTOPVRPM.CHIATL
    1.290
    -0.060
    -4.4%
  • TSTOPVRPM.LAXSEA
    1.700
    0.130
    8.3%
  • TSTOPVRPM.ATLPHL
    1.520
    0.060
    4.1%
  • TSTOPVRPM.LAXDAL
    1.120
    -0.030
    -2.6%
  • WAIT.USA
    139.000
    -12.000
    -7.9%
  • ITVI.USA
    9,157.620
    -27.560
    -0.3%
  • OTRI.USA
    2.590
    -0.020
    -0.8%
  • OTVI.USA
    9,162.320
    -26.570
    -0.3%
  • TLT.USA
    2.670
    -0.010
    -0.4%
  • TSTOPVRPM.DALLAX
    1.230
    -0.070
    -5.4%
  • TSTOPVRPM.PHLCHI
    1.100
    -0.030
    -2.7%
  • TSTOPVRPM.CHIATL
    1.290
    -0.060
    -4.4%
  • TSTOPVRPM.LAXSEA
    1.700
    0.130
    8.3%
  • TSTOPVRPM.ATLPHL
    1.520
    0.060
    4.1%
  • TSTOPVRPM.LAXDAL
    1.120
    -0.030
    -2.6%
  • WAIT.USA
    139.000
    -12.000
    -7.9%
Passport Research

Trucking Markets: Finding a floor?

The rate of decline in contracted truckload volumes is slowing, while brokers slash spot rates to carriers, widening their margins on fewer loads.

The good news is that the parts of the economy that need to be shut down have, for the most part, already been shut down. We think that any significant further downside risk will come from credit and business risk as many shippers, perhaps especially retailers, undergo financial stress-tests like they’ve never seen.

That financial stress has already brought negative volatility into contract rate markets: we’ve seen emails from retailers asking their contracted carriers for 15% rate cuts.

At this point it’s perhaps unnecessary to point out that very low rates and very low volumes will accelerate the exit of trucking capacity from freight markets. The highly fragmented lower end of the trucking industry, consisting of small carriers with 6 or fewer trucks, will be ineffectively served by federal economic relief measures, in our view.

There is some evidence that as volumes have pulled back, available freight is becoming more concentrated in the five or six largest outbound markets in the country, which makes sense given how widespread demand growth was in last month’s rally. 

We will follow up on the concentration hypothesis in Friday’s Special Topics report.

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John Paul Hampstead, Director, Passport Research

John Paul conducts research on multimodal freight markets and holds a Ph.D. in English literature from the University of Michigan. Prior to building a research team at FreightWaves, JP spent two years on the editorial side covering trucking markets, freight brokerage, and M&A.

8 Comments

  1. Im waiting for the DMV to open back up so I can test for my class A, Am I reading that I might not be able to get a job, start a career in the truck driver business ❓ Should we all be worried fo our future ❓

    1. LOL
      Exactly what we need! More regulation.. just like ELDs and HOS.

      If you can’t get business directly from shippers, then too bad… this is how the market works.
      You are at the mercy of brokers just like they are at the mercy of carriers.
      If you don’t like it, get shipper business directly or find new employment.
      We all work for someone… even the business owners work for customers.

  2. How is it that the brokers can price gouge during this and they aren’t held accountable???
    They are making more of a percentage than the truckers with no overhead and nothing gets done!!??

  3. Yo soy dueño de camion por 13 años y la solucion es sencilla solo tenemos q parar por 1 semana sin salir de la yard y ahira es un buen momento para hacer precion al gov q regule el pociento a los corredores ..es irracional lo q estan pagando las cargas.

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