Although the pullback in fuel prices has benefitted all carriers, small-medium fleets, in particular, that primarily live in the spot market and purchase Diesel at retail, have been thrown a desperately needed lifeline. However, that lifeline has also allowed the capacity of marginally viable operators to remain in the game longer and has yet to be balanced with any freight tailwinds. Likewise, unless there are notable changes to capacity and/or freight growth, the supply/demand equation will continue to be in the shippers' favor well into the year. On a more positive note, despite a recent shift in bond market expectations of higher interest rates for longer, the consensus macro view has migrated from a hard landing to a soft landing (slow or no growth butnorecession) or, at worst, a "shallow/rolling sector" recession. BMO's economists are in that group and have all but taken thepotential for a hard landing (15% chance, down from a prior expectation of 25%) off the table. Still, as of late February, ashallow recession (50% chance) sometime this year remains the base case.

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