So This Is What The Bottom Of The Freight Market Feels Like

us from inflation anytime soon. Truckload rates have gotten absurdly low, while maritime imports remain sluggish. This means foreign goods won't be saving us from inflation anytime soon.

Joe Antoshak

Freight Waves

Over the past few months, freight pundits have wondered when conditions will improve. In the first quarter despite this, freight rates rose.

The initial glimmering of hope

Capacity remained high for demand. This pushed rates even lower and contributed to the high-ticket items.


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It is a growing industry. The freight industry did not benefit from the increase in sentiment.

The Q2 is underway, but there are no signs of a significant uptick in the near future. These headwinds have become more evident as earnings from major transportation companies are released. J.B. Hunt's management, which is one of the most important bellwethers in freight transportation, has tempered its expectations for the remainder of the year.

Referred to the current conditions as a recession in freight.

It doesn't take long to find out about the ridiculously low truckload rates on social media. In the meantime, imports by sea remain slow, meaning that foreign goods will not be able to save domestic volume. The most powerful pricing power has been enjoyed by shippers in many years.

According to the respondents, we might be at the bottom end of the market for freight.

Q2 Freight Sentiment Indexes


The indexes are derived from surveys conducted by carriers, brokers, and shippers. They measure profitability in the short-term, as well as longer-term, and workforce and investment sentiment. Since we began tracking sentiment in Q4 of 2022, the overall score is now negative.

Carrier sentiment: praying for the nadir

Even in these conditions, it's important that the carrier score is negative (minus 0,52). This is because metrics that are longer term, like the profitability of a year down the road, are weighted at the same level as those near-term. Most respondents assume that the second quarter of next year will be more lucrative than this one.

In order for a score to be negative, the sentiment in the near term must be consistently very poor, relative. It is for carriers at the moment.

Sector respondents scored a near-term profit of minus 11,22. This means they expect Q2 will be less profitable than the previous quarter. This is the third consecutive quarter that respondents expect to be less profitably than the previous quarter. Near-term workforce was scored at minus 4,26. This means that carriers expect to have fewer employees on their payroll by the end of the quarter.

This could be a sign that capacity is beginning to exit the market. This would begin to put upward pressure on the rates.

The carriers continue to be optimistic about the future. The carriers are less confident about the early 2024 compared to last quarter, as their longer-term profitability (6.28%) and workforce (4) have decreased. This trend is consistent with the Q2 guidance provided by public trucking companies.

Business investment sentiment, a measure of how accepting or unaccepting the current climate is for new technological investments, dropped from 8,69 to 2,60. This means that carriers are less likely than before to seek out third-party vendors who can provide services which improve operational efficiency.

Brokers are always looking for new opportunities

It doesn't seem logical at first that brokers are feeling more positive in Q2. It is most likely that, when we surveyed for Q1, the data suggested that the freight market was stabilizing. This tends to create a more challenging climate for brokers. Truckload spot rates, however, continued to fall.

The Transportation Intermediaries Association is a trade association for transportation intermediaries.

Published a whitepaper in February

Double brokering fraud can cause serious damages. This white paper was intended to increase the visibility of those who were concerned about this practice. It claimed that it could cost brokers up to half a billion dollar annually.

Double brokering is often committed fraudulently. A broker will select what they believe to be a carrier to complete the load, and sometimes even use a similar name to that of a well-known, large carrier. This carrier will use a quick-pay system that takes a small portion of the payment and then repost the load for a hugely inflated price. Other carriers are enthralled by this. The fake carrier receives the quick-pay money but does not pay the actual carrier to whom it delivered the load. Double-brokering "carriers" then disappear. While the original broker isn't technically responsible for the double payment but will pay to avoid damaging the relationship with shipper.

In the end of March, the Federal Motor Carrier Safety Administration sided with small-business carriers over freight brokers. The FMCSA announced on March 23 that it would begin implementing

A formal rulemaking procedure

The Owner-Operator Independent Drivers Association (OOIDA) and the Small Business in Transportation Coalition(SBTC) have proposed this proposal. The following day, the TIA announced that it had rejected a petition to remove a requirement for brokers to disclose transaction records between shippers and brokers to carriers.

The question, according to the OOIDA petition and SBTC petition, is whether a law that requires a driver, or any other counterparty, to be able obtain and review transaction documentation from the broker - which is currently the law [49 CFR371.3(c),] - can be changed into a requirement that counterparties get this documentation if asked. SBTC stated in its petition that freight rates had dropped dramatically and motor carriers reported brokers using 'profiteering', price gouging, and low-balling techniques.

Overall broker sentiment was 9.39 points, an increase of 2.42 points over Q1. The near-term profitability perception is now positive, up 5.11 to 0.19, and the longer-term profit sentiment has risen 5.38 to 16.88.

Business investment was the only category where brokers did not improve. It fell 3.25 points, to 11.52. The overall investment sentiment of business has decreased in the past two quarters when averaging three segments: carriers, brokers and shippers. Our indexes are only as old as they get.

Shipper Sentiment: Holding Power (Cautiously).

It's not a market that anyone is comfortable with. The shipping industry has some leverage in the pricing of transportation, but it doesn't make them a slam-dunk. There are many unknowns in the economy. We do not know when the Federal Reserve is going to stop increasing the federal funds rate.

Central banks are the transmissions if economies are like automobiles. In the U.S., the Fed has definitely shifted down. It's difficult to determine the actual rate of slowdown or the expected rate.

The fate of 2023 is largely in the hands and control of the consumers. In our Q2 Outlook Survey, 71% said that consumer goods demand will be the primary driver for trucking capacity during the second half this year. This was 20 percent more than inflation, the second most common driver. It is clear that the consumers' continued resilience depends on their ability to keep their jobs, and on inflation continuing its downward trend.

We are seeing an increase in the number of cases.

Evidence from box-makers in the U.S.

Current demand and volume expectations for the remainder of the year are muted. Packaging Corp. of America reported that its Q1 results showed that corrugated product shipments had increased.

The steepest quarterly drop since the Great Financial Crisis


In Q2, more than half of shippers said their current inventory levels were higher than their target. This was their biggest concern. This group is the most positive of the three segments, but sentiment has deteriorated in four of five categories over the past quarter. One category defied this trend, and that was near-term profitability. It grew to 11,26 in Q3 from 5,39 in Q2.