Falling freight demand shapes 2022 outlook

If you haven’t read the article that FreightWaves’ CEO Craig Fuller wrote last week titled, “Just 3 years after 2019 trucking bloodbath, another is on the way,” we recommend starting there

In this report, we add to the discussion with additional SONAR highlights and what a coming downturn in the freight market means for other modes.   

The truckload market has come under pressure as consumers are not only faced with significant inflationary pressures but also a shift back to services and experiences after purchasing goods for the past 24 months. Volume levels and rejection rates are at their lowest level in over 18 months, causing spot rates to plummet despite higher fuel costs. Rising insurance, maintenance and fuel expenses are squeezing carriers’ margins in the face of falling revenue, which foreshadows a bleak near-term future for the market.

A drop in freight demand could have an initial neutral to positive impact on intermodal volume and service levels before intermodal volume ultimately declines. An initial intermodal volume boost could come from reduced congestion and better container turn times, which would lead to improved container availability. In March, intermodal demand held up while dry van demand declined. As more time passes, the intermodal and dry van segments will be in greater alignment, which could lead to overcapacity in intermodal as well.

The ocean market is a little better insulated from the boom and bust cycles that the truckload market faces. This is because there are a limited number of carriers that control ~90% of the market. Demand on the ocean hasn’t faced a slowdown but the market faces increased geopolitical uncertainty as well as shutdowns in the largest exporter in the world.

Related Posts

Rocky road on the way in 2023?

SONAR highlight reel: West Coast freight markets loosen across modes

Freight Brokers Say Retaining Customers Is A Major Concern


What's the SONAR ROI?

By increasing the number of loaded miles per day your drivers drive by 1% and your rate per mile by $0.03 you will make more per week #WithSONAR.

#WithSONAR you can save up to per week through better bid negotiations and more effective management of your routing guide.

#WithSonar you can add 1 more load per person each day and increase $5 margin per load, earning your company an extra per week.

Disclaimer: Every company’s circumstances are unique. Fixed and variable expenses, market conditions and operational factors vary. Unforeseen events may also affect results. Calculated potential results reflect the consensus expectation of FreightWaves’ experts. Actual results may vary.

Read Recent Posts

December 14, 2022

Rocky road on the way in 2023?

September 19, 2022

SONAR highlight reel: West Coast freight markets loosen across modes

August 22, 2022

Freight Brokers Say Retaining Customers Is A Major Concern