America’s Freight Recession Nearing It’s End

The trucking industry is beginning to recover from a lengthy recession that followed the pandemic’s peak transportation boom, according to logistics experts. Data from Motive reveals a 30% year-over-year increase in trucking volume to major retailers’ distribution centers in June, signaling a strong restocking trend. Retailers have started their peak shipping season early due to concerns over Red Sea transit delays and potential port strikes.

Hamish Woodrow from Motive highlighted that restocking is robust across various retail sectors, with significant increases in orders from discount retailers and others. The early peak season has been driven by disruptions and fears of further delays, pushing retailers to act sooner.

The trucking sector, which faced a downturn due to pandemic-era surpluses and subsequent bankruptcies of major firms like Yellow and Convoy, is seeing a gradual improvement. Woodrow anticipates that the freight recession will end by the third quarter of 2024, with rates expected to rise as truck capacity tightens.

Trucking stocks have been volatile, with some recent gains but also challenges following disappointing earnings reports. Despite this, industry experts like Paul Brashier and Noah Hoffman suggest that freight rates may have hit bottom, and there are signs of a recovery similar to pre-pandemic conditions. Discount retail trends are driving early and competitive back-to-school sales, impacting freight volumes and logistics strategies.

Globally, transportation and manufacturing supply chains are also showing signs of improvement, with growth in Asian manufacturing and increased supply chain activity, according to the GEP Global Supply Chain Volatility Index.

Source – CNBC