This sound is generated automatically. Let us know if you have any feedback.
Dive Brief:
- The trucking market showed signs of capacity balancing, where a negative trend turned positive in March, according to data from the Federal Motor Safety Carrier Administration.
- The metric compares the number of trucking companies exiting their own businesses with those that retained or acquired operating power. Recalls are reflected when a carrier loses or suspends its ability to transport goods interstate.
- The change is only a monthly snapshot, and a similar situation occurred in March 2023, FTR Vice President of Trucking Avery Vise said in a LinkedIn post. However, the data revealed that “exits from interstate carriers slowed significantly,” DAT iQ principal analyst Dean Croke said. weekly market update.
The recent snapshot shows that the additions outweigh the outgoings
Monthly changes of active additions (grants and restorations) versus exits (revocations) in the operating authority.
Dive Insight:
Inflows and outflows are only one piece of the puzzle in understanding how the trucking market affects rates, Croke noted at the Mid-America Trucking Show in March. Demand is still needed to effectively drive interest rate hikes.
Capacity totals since the start of 2020 have shown a further flattening of grants, which have been outpacing withdrawals for most of the past three years. As of January 2020, cumulative grants to the operating authority exceeded 345,000, while outflows remained slightly lower.
Since the start of this year, however, business exits have once again taken the lead, a trend that has held for every month in Q1. The switch could signal a shift in the market.
Cumulative withdrawals wipe out grants in 2024
Total trucking companies granted or revoked from January 2020 to March 2024.
But restorations are now underway and with this supply dynamic, excess capacity continues to remain. Outputs are still slowly flowing out of the system, analysts said, and several trucking leaders previously said overall outflows were slower than expected.
While industry leaders have relied on these types of monthly entry and exit numbers to get a sense of trucking capacity, analysts note that the data may not capture declines and expansions in fleets because the information does not show how many trucks are owned in a functional principle.
Carriers and drivers are still yearning for better rates after the boom and bust cycle of the COVID-19 pandemic.
But even with low prices, many struggling companies will take low prices and excess capacity still exists, said Joe Rajkovacz, director of government affairs and communications for the Western States Trucking Association.