Paul Pfeiffer, the Chief Financial Officer at Anderson Trucking Service, provides an update on the trucking market, reviewing his previous predictions and discussing current trends in demand, supply, costs, and freight rates.
While a recession was expected by mid-2024, it hasn't started yet. However, the economy has slowed, with only slight growth in GDP. Various economic indicators suggest a continued slow period, meaning less demand for freight hauling through the rest of 2024 and into early 2025.
The trucking industry is seeing fewer trucks available, confirmed by various data including load board activity and reports of trucking bankruptcies. This decrease matches the current low demand for freight services.
It's becoming more expensive to operate trucks, with costs increasing by 37-38% since 2020. This increase affects small fleet owners and independent drivers the most, due to their limited buying power for fuel, tires, and other necessities.
Both spot market and contract freight rates have stabilized but remain low. Some recovery is expected, but without economic growth, any significant increase in rates may be delayed. Pfeiffer advises securing stable freight contracts and being smart about costs, especially as we head into warmer months where fuel costs can rise.
Pfeiffer advises truck drivers to seek out freight sources as options may be more limited due to low rates. He also recommends focusing on cost-saving measures, such as using APU's to save on fuel. Despite tough conditions, there are opportunities, particularly in specialized markets like open-deck hauling, where rates are slightly better and more stable.
As 2024 continues, these insights will help truck drivers and trucking companies navigate the ongoing changes in the industry.
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