Trucking news and briefs for Monday, July 25, 2022:
Freight rates continued to slide in June to ACT's lowest index since May 2020.
Carter Vieth, Research Associate at ACT Research, said June’s index “shows volumes continuing to contract, as sustained inflation and high fuel prices erode consumer confidence.”
He added that consumers are choosing to spend more money on travel rather than goods, which is keeping freight volumes down.
“Pricing strength continues to moderate from January’s peak, as volumes fall and more drivers enter the industry,” Vieth noted. “The Omicron roll-off and Russia’s invasion of Ukraine helped hasten the decrease by adding significantly to freight costs via fuel, hurting spot rates, even as consumer spending began reverting to services from goods.”
He added, “The supply-demand balance reflects loosening in the trucking market and a late stage in the freight cycle. With improving capacity and slowing freight volumes, the pendulum has finally swung from tight to loose. Recent entrants reliant on spot rates will struggle, and their exit will set up the next tight market.”
Regarding driver availability, Vieth said the index’s reading “is the first reading above 50 in two years, the 8th highest reading in the index’s history and well above the 39.1 average in the 4-year history of this index.”
