A CONSENSUS is emerging that spot us truckload rates will hit bottom sometime in the first quarter, followed by contract truckload rates in the third quarter, reported IHS Media.
'We're always looking at how the next upward cycle will be set up and what's going to enable that?' said David Spencer, director of business intelligence at Arrive Logistics, a broker and third-party logistics provider (3PL).
'It's been a little bit flatter decline than I anticipated, There's been a bit of waiting for spot rates to find a bottom,' Mr Spencer said.
Arrive expects truckload spot rates to continue to drop in the first quarter, after some volatility this quarter due to end-of-the-year demand, and then remain relatively stable, with the gap between contract and spot truckload pricing gradually closing throughout the year. The 3PL's forecast calls for national contract rates to drop to an average of about $2.22 per mile by the third quarter of 2023.
'That's still about 15 to 18 cents above the peak from the last cycle,' Mr Spencer said. 'There's still a healthy freight environment. When we talk about movement in the market it's about supply in relation to demand, not supply in relation to historical levels.'
If the US economy has 'normalised,' trucking rates would be expected to rise late in the third quarter next year as the year-end holidays approach. That could establish a new benchmark for higher contract rates going into 2024, though Mr Spencer noted Arrive is not forecasting for 2024 yet. Getting through 2023 may be difficult enough.
Coyote Logistics expects shippers to experience lows and highs in 2023. 'I think 2023 may be a tale of two halves,' said Nick Shroeger, Coyote's chief solutions officer. 'The first half of the year will probably be relatively soft. But who knows, though. There could be a massive disruption that happens in January and February. But in the second half of the year, I see things start to climb back up.'
Said ACT Research analyst Tim Denoyer in the Cass Freight Index report for November: 'The supply-demand balance in US trucking markets has loosened significantly this year, and as a result freight rates are leveling off and set to soften further in the months to come.'
The Cass Freight Index did see shipper expenditures rise 1.8 per cent month-to-month in November, after dropping 4.9 per cent in October. Cass inferred that rates rose 3.7 per cent in November, reversing a sequential decline in October. That data correlated with the movement of the US long-distance truckload producer price index, which rose in October and November after a months-long decline.
But the increases will be short-lived, Cass suggested, with the expenditures and inferred rate indexes going negative year on year in early 2023, and larger savings for shippers ahead.
'Now that the pendulum has swung from fleets to shippers, some crucial questions about the freight rate cycle have been raised: How long? And when will it turn?' said Mr Denoyer.
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'We're always looking at how the next upward cycle will be set up and what's going to enable that?' said David Spencer, director of business intelligence at Arrive Logistics, a broker and third-party logistics provider (3PL).
'It's been a little bit flatter decline than I anticipated, There's been a bit of waiting for spot rates to find a bottom,' Mr Spencer said.
Arrive expects truckload spot rates to continue to drop in the first quarter, after some volatility this quarter due to end-of-the-year demand, and then remain relatively stable, with the gap between contract and spot truckload pricing gradually closing throughout the year. The 3PL's forecast calls for national contract rates to drop to an average of about $2.22 per mile by the third quarter of 2023.
'That's still about 15 to 18 cents above the peak from the last cycle,' Mr Spencer said. 'There's still a healthy freight environment. When we talk about movement in the market it's about supply in relation to demand, not supply in relation to historical levels.'
If the US economy has 'normalised,' trucking rates would be expected to rise late in the third quarter next year as the year-end holidays approach. That could establish a new benchmark for higher contract rates going into 2024, though Mr Spencer noted Arrive is not forecasting for 2024 yet. Getting through 2023 may be difficult enough.
Coyote Logistics expects shippers to experience lows and highs in 2023. 'I think 2023 may be a tale of two halves,' said Nick Shroeger, Coyote's chief solutions officer. 'The first half of the year will probably be relatively soft. But who knows, though. There could be a massive disruption that happens in January and February. But in the second half of the year, I see things start to climb back up.'
Said ACT Research analyst Tim Denoyer in the Cass Freight Index report for November: 'The supply-demand balance in US trucking markets has loosened significantly this year, and as a result freight rates are leveling off and set to soften further in the months to come.'
The Cass Freight Index did see shipper expenditures rise 1.8 per cent month-to-month in November, after dropping 4.9 per cent in October. Cass inferred that rates rose 3.7 per cent in November, reversing a sequential decline in October. That data correlated with the movement of the US long-distance truckload producer price index, which rose in October and November after a months-long decline.
But the increases will be short-lived, Cass suggested, with the expenditures and inferred rate indexes going negative year on year in early 2023, and larger savings for shippers ahead.
'Now that the pendulum has swung from fleets to shippers, some crucial questions about the freight rate cycle have been raised: How long? And when will it turn?' said Mr Denoyer.
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