Trucking industry leaders are finally starting to feel better about the state of the market. That optimism could be a crucial part of actually arriving at a better future.
Every quarter, Truckstop and Bloomberg team up to poll industry leaders about their current market sentiments. The surveys paint a powerful picture of how perception is influenced by current spot market rates.
In the duo’s most recent survey, brokers expressed improving sentiments for the first time in a long time. Almost half (49%) of brokers said they expect demand to increase over the next three to six months.
Overall, carriers appear slightly less confident about the market. This difference in perception can be attributed to the different ways brokers and carriers experience the market. While brokers have a longer and broader view of overall market conditions, carriers – especially owner-operators – are heavily influenced by what is happening with rates in the here and now.
For many carriers, Truckstop Chief Relationship Officer Brent Hutto noted that conditions over the past couple of years have started to feel like a full-blown recession. While overall economic markers do not support that notion, the feeling remains. It is likely underscored by the ongoing impact of inflation.
“The inflation has really hit [carriers] hard because it costs them more to operate, which means it cuts into their profitability,” Hutto said.
With spot rates hovering around $2.30 with about a 46-cent fuel surcharge, it is possible for the most efficient carriers to turn a decent profit. For less efficient carriers, however, current rates – combined with ongoing inflation-related stressors – have seriously undercut their ability to make money.
Broker and carrier sentiments can be useful indicators of what is happening – and what will happen – in the market, but their perceptions are not the only ones that matter.
When it comes to predicting how sentiment itself will impact the logistics industry, consumer sentiment is also a powerful factor. Hutto noted that many consumers also believe the U.S. has entered a recession and that affects consumer behavior, purchasing patterns and, consequently, freight demand.
“Sentiment drives everything in the U.S.,” Hutto said. “We are the biggest consumption market in the world.”
Overall, all signs point to a demand increase in the near-term or midterm future. Still, getting to that point – and feeling good about it – will likely prove challenging for players across the industry, as well as consumers.
When a downswing lasts this long, it can be difficult to maintain a positive view of the future. Both brokers and carriers are beginning to see, however, that better days are ahead.
Click here to read more about current market sentiment.