COLUMBUS, Ind. – The latest release of the ACT Freight Forecast, U.S. Rate and Volume OUTLOOK reported truckload spot rates, insights on the upcoming Commercial Vehicle Safety Alliance (CVSA) Road Check and freight cycle bottoming.
“DAT dry van truckload spot rates are tracking toward $1.74 per mile, net fuel, in February, down from $1.83 in January,” Tim Denoyer, ACT Research vice president and senior analyst, said, “Against the prior-year period, dry van rates are down 34%, a cycle low, but we expect the declines to start to moderate from here as the bottoming process continues.”
CVSA’s 2023 Road Check is scheduled for May 16-18 this year and will be a litmus test for spot rates, Denoyer said, adding that further declines in rates will accelerate the emerging capacity correction.
“Truck driving is a very tough job, so it won’t be too hard to convince people to find something else to do as the financial stress of these low spot rates grows,” Denoyer said. “Just as the cure for high prices is high prices, the cure for low prices is low prices. While industry conditions are broadly loose, cost economics will drive a supply/demand balance shift in the spot market first, perhaps as soon as Road Check.”
Denoyer added that the bottoming process is ongoing, and layoff announcements by transportation companies have begun. He said it will take time, but ACT Research predicts that labor attrition will begin this year and will be key to a stronger rate environment in late 2023.
“The cycle-bottom phase features slowing capacity and thinning marginal capacity amid lower rates, preceding an early-cycle tight market,” Denoyer said. “We think both the cycle-bottom and early-cycle phases are possible in 2023.”
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