Lower Diesel prices in November offer a modest but welcome reprieve from the most challenging industry climate in several years, particularly for carriers that primarily transact in the spot market. But despite the near-term positive for carrier cash flows, the reason behind declining fuel prices may be unwanted slowing growth. Fuel price volatility aside, decelerating butelevated overall tonnage has masked relentless spot market rate pressure caused by evaporating overflow freight from the contract market, gradually increasing fleet capacity, and an underwhelming peak season. Given typical seasonal freight softnessin the early months of a calendar year and capacity continuing to enter the market, durable relief from rate headwinds may wait until mid-2023. The good news, however, is that the Fed is signaling a slower pace of rate increases as soon as December. Further, with employment demonstrating resiliency, economists are raising the likelihood of dodging a recession or at least a later starting, shallower, and more protracted recession than currently forecast.
Industry Update: Truck Transportation Fall 2022
