Freight Recession? Blame the Imbalance of Supply and Demand

A recent report from FreightWaves Daily (FW) does much to explain the current freight market and operating environment, citing the imbalance of supply and demand as the root cause.

A recent report from FreightWaves Daily (FW) does much to explain the current freight market and operating environment, citing the imbalance of supply and demand as the root cause.

According to FW, freight volumes are at some of the highest levels so far in 2023, up 16% over 2019 pre-pandemic levels. However, truckload capacity far exceeds the freight available to haul. Since 2018, FW has measured truckload volumes in relation to capacity through a proprietary index showing the number of truckload orders rejected during the prior week. Since 2018, the proportion of rejected loads has ranged from a low of 2.5% to a high of 30%. Rejected loads are low when there is overcapacity and high when there’s a shortage of trucking capacity. Currently, only 3.5% of loads were rejected, which is low by historical standards.

Trucking companies as well as single-truck operators reject a percentage of loads every day for a variety of reasons in response to orders from shippers of all kinds — retailers, manufacturers and industrial firms. FW’s data is focused on the overall trucking market, not what takes place at individual companies. The article does acknowledge that bankruptcies, closures and downsizings have been occurring across the industry for more than a year and a half. Despite these changes which would seem to remove excess capacity from the market, overcapacity still remains the primary cause of the imbalance between freight and available trucks. FW concludes that, while freight volumes are more robust than would be expected had there been a sharp economic recession, the softness in freight is a capacity issue, not a demand issue. (Adapted from FreightWaves Daily)

Supreme Court Overturns “Chevron Doctrine”

10 July 2024

Anyone who has been in business for any length of time can cite a number of times that federal regulatory agencies have had a free hand in regulating businesses such as trucking. That is why carriers and other industries that want a fair fight to challenge regulations in the future may have been given a gift from the U.S. Supreme Court June 28.

Miss the Deadline to Challenge a Regulation?

10 July 2024

This session, the U.S. Supreme Court overturned the Chevron doctrine, a longstanding policy under which lower courts almost always sided with regulatory agency decisions where the intent of Congress was not clear. Overturning Chevron opened the door, many legal experts believe, to allowing challenges against many existing regulations.