Watch Now


State of Freight: How long will trucking market trough linger?

With earnings coming in weak, Fuller and Strickland ponder when the bleeding might stop

The bottom of the weak freight market may be here, according to Craig Fuller speaking at the April State of Freight webinar. (Photo: FreightWaves)

With the equities market for trucking stocks reeling this week on the backs of two companies’ highly bearish disclosures, one question loomed large on the FreightWaves State of Freight webinar: Are we getting near the bottom?

FreightWaves CEO Craig Fuller and the head of market research for FreightWaves’ SONAR data dashboard, Zach Strickland, were mostly optimistic that the answer might be yes. Here are five takeaways.

J.B. Hunt’s earnings may be the sign that things are at a bottom

Fuller called a recent negative earnings report by J.B. Hunt (NASDAQ: JBHT) and a lowering of forecast earnings by Knight-Swift (NYSE: KNX) a “capitulation” that could signal a market bottom.

Referring to an article he wrote for FreightWaves earlier this week, Fuller said the article did not herald a recovery in freight markets. Rather, “it’s a market bottom.”


“I just think the market is capitulating,” Fuller said. “There’s an interesting thing in financial markets where you almost need everyone to sort of agree to give in for there to be a market recovery. To me, this is a moment of capitulation.”

Fuller said previously in the down cycle, larger carriers had signaled in earnings calls, presentations and simple market anecdotes that the bigger companies were “unwilling to sort of make significant concessions in terms of rates.”

But now, “we’re seeing the larger carriers capitulate.” And that leads to bullishness on his part because it brings about more of a normalization between spot and contract prices. “I think as we see contract rates refresh as new rates come in, I am bullish for that, as that is the capitulation,” Fuller added.

On the J.B. Hunt earnings call, Darren Field, the president of intermodal at the company, said the market has been “a dogfight, with truckload capacity pricing being really, really competitive.”


Capitulation, Fuller said, involves “the moments where the larger carriers have realized that they’re going to have to do things that they did not want to do.”

The demand side of the equation

Volumes are “relatively strong,” Fuller said. He and Strickland, who moderates the webinar, pointed to the Contract Load Accepted Volume index in SONAR. It is up 9% in the past year.

Strickland said CLAV is especially useful at showing freight volumes because the data is stripped of tender rejections. “So it’s a pretty good measure of the absolute volume carried by some of the larger fleets,” he said.

The fact that it’s up 9% in a year “tells me that volume is pretty robust,” Fuller said. The problem continues to be “just too much capacity.” 

Fuller added that projections of U.S. GDP growth — noting 3% growth in the first quarter — generally signal higher freight volumes down the road. “It’s conceivable that if we get a 2% to 3% GDP growth that we could be back to sort of where we were a year ago,” Fuller said. But he added, “I’m not suggesting there’s going to be a massive surge.”

Strickland added, “One of the things that I have trouble kind of conveying to people right now is that it’s not a demand issue.”

An anniversary nobody wants to acknowledge

Fuller said he dates the start of the Great Freight Recession to the end of March 2022. The first recession that accompanied the start of the COVID pandemic brought the Outbound Tender Volume Index in SONAR down to less than 9,000, and as Fuller said, there was a belief that it might drop to 7,000. The OTVI currently stands near 11,325.

The upside of the V-shaped recovery that quickly followed the beginning of the pandemic brought the OTVI back up to pre-pandemic levels by June 2020. That strong cycle lasted until about March 2022 before it entered the down period that is now in the midst of its second anniversary.


It shows up in many places, but Fuller said it most clearly is in the Outbound Tender Reject Index, which measures contract freight that carriers choose not to lift. It dropped from about 15% two years ago to its long-languishing stay in the 3% to 5% range, where it has been pretty much for those 24 months.

A Trump election could impact buying patterns

“The threat of Donald Trump winning the election is going to force retailers and importers to think differently about what they do in the supply chain,” Fuller said when asked about how November’s presidential election might impact freight markets. Trump’s promise for even more robust tariffs than in his first administration will need to be on the mind of importers should a Trump return to office become evident as Election Day draws closer. “I think he’s going to move relatively quickly to start putting these tariffs in place because he’ll feel like he wants to send a really strong message,” Fuller said.

Given that, it’s likely that companies may begin to build inventories ahead of new tariffs. Fuller also noted that given some recent steps by the Biden administration, and its failure to take the Trump-era tariffs off, “they’re both protectionist.”

“The bottom line is, I do think we will see increased imports as we did back in 2017,” Fuller said, referring to the period before the first tariffs were implemented by the Trump administration.

Measuring private fleets

Fuller said OTRI and OTVI do not measure private fleet activity because there is no such thing as tendered freight to be rejected. The private fleet handles whatever comes its way. “We do know that the private fleets expanded aggressively during COVID and have continued to do that,” he added.

The continued growth in sales of Class 8 tractors even in the midst of a freight recession is likely the result of increased private fleet activity, according to Fuller. “We’re not sure exactly how much but it definitely affected us for sure,” he said.

More articles by John Kingston

Scopelitis seminar delves into lease purchase deals, M&A, ESG and more

5 auto haulers combining to create publicly traded trucking company

CTA, OOIDA to appeal court decision upholding AB5 in California trucking

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.