The spot market likely bottomed out in April, ACT Research said Wednesday, after spot rates rose in May.
The shift in the downcycle could bring a return to more competitive rates. But it’s been driven by a decline in labor capacity.
“We are on track for a record contraction in labor capacity this year, which is key to the bottoming process,” Tim Denoyer, ACT Research’s vice president and senior analyst, said in the release.
The firm previously projected that 50,000 long-distance general freight trucking jobs could be lost this year, based on a Q1 decline.
“Since October last year, just over 15,500 interstate carriers have left the industry as the market readjusts supply to tepid demand levels,” DAT Freight & Analytics Principal Analyst Dean Croke also noted in a Tuesday blog post. “The latest numbers for May showed the second-highest number of carriers left the sector, surpassed only by January this year.”
ACT Research noted gains in rates have held since International Roadcheck, where demand in mid-May increased as expected due to the annual inspection spree.
Werner Enterprises’ CEO, Chairman and President Derek Leathers made similar comments on the downcycle, saying it appeared to hit its trough in April.
Despite the similar observations, Croke believes some uncertainty remains.
“As spot rates bottom out and show signs of increasing, we’re left to wonder if the bleeding has stopped and the sentiment is improving,” Croke wrote. “One thing is sure, though: When the market turns positive later this year, shippers will have far fewer carriers at their disposal.”
