Dive Brief:
- Marten Transport reported April 18 that it has continued its stance of not lowering rates, a position it’s held since early August.
- The holdout comes as operating income for the refrigerated carrier dropped to $12.3 million in Q1, down 58% year over year, per an earnings announcement.
- The company reiterated its call of fair compensation for premium service, Executive Chairman Randolph Marten said in a statement once again.
Dive Insight:
An outsized supply of firms is still clinging to the market, which dominant firms say amounts to overcapacity and has left power in the hands of shippers.
With that power, shippers have had “continued success in leveraging an overcapacity market to their advantage to attain rates at or below cost,” P.A.M. Transportation Services noted in its Q1 earnings.
But multiple trucking firms, including Knight-Swift, say they are refusing to go lower.
Executives have sought to reassure investors that the downturn is part of a freight cycle. The American Trucking Associations’ chief economist, Bob Costello, has labeled the downturn a truck freight recession. This comes as real GDP, however, increased 1.6% from Q4 to Q1, per the U.S. Bureau of Economic Analysis.
“There will come a time when pricing and volume will return,” J.B. Hunt’s intermodal president, Darren Field, said on a Q1 earnings call.
