The conditions that propelled the industry to new heights of profitability last year have eroded throughout the 1st half of 2022. Seasonal softness, waning imports from China, re-stocked retail inventories, raging inflation, a heavy-handed Fed intent on dampening demand, and a consumer shift away from discretionary goods have stalled freight momentum, loosened capacity, and exerted downward pressure on freight rates. Skyrocketing Diesel prices, escalating non-fuel operating expenses, and record equipment costs have also assaulted carrier cash flows. Although these headwinds have gained the upper hand on industry fundamentals, several remaining positives provide the potential for a solid year overall for well-positioned carriers. These include the exit of economically unviable operators, a healthy employment and wage environment, strong consumer and business balance sheets, steady activity in the construction and energy sectors, incomplete replenishment of auto inventories, and a gradual normalization of freight from China.
Industry Update: Truck Transportation Spring 2022
