Q1 has come and gone, and the dry van truckload market did not turn as more optimistic predictions had predicted (https://lnkd.in/gbWQFQB6). Q2 hasn’t looked any better? Why? The answer: demand for truck transportation remains weak. This is in spite of strong year-over-year gains in imports and robust retail trade sales. How can this be the case? Simple: domestic manufacturing still produces the bulk of for-hire trucking demand, and freight-weighted domestic manufacturing remains in a deep slump. One chart below showing this using the seasonally adjusted for-hire trucking ton-mile index that I coauthor. Thoughts: •February’s seasonally adjusted ton-mile reading jumped 1.5% from January’s low reading (which occurred due to the polar vortex) but remains down roughly 2% from this time in 2023 (and remember, we had been in a freight recession for roughly 5 months as of February 2023 [September 2022 saw the first major drop in demand]). •Relative to the seasonally adjusted peak from March 2022, demand for truck transportation has dropped 4%. That may not seem like much, but employment has fallen just 0.3% over this same period (see https://lnkd.in/gdYDGD4j). •For those wondering why demand isn’t stronger given those strong import gains, remember what I’ve been preaching for year(s): imports don’t represent that much freight relative to what we manufacture domestically. Consequently, all the stock analysts focusing on import-centric retail trade are missing the boat (pun intended). Implication: for the dry van truckload market to turn from bear to bull, we either need a much larger loss of capacity (unlikely to happen quickly) or for demand to improve substantially, which will require a sharp rebound in domestic manufacturing activity (also unlikely to happen quickly). As such, I would pencil in “blah” conditions for the immediate future. #supplychain #supplychainmanagement #shipsandshipping #freight #trucking
Zachary Ramsay
7mo
Is it fair to assume that the nearshoring shift in a post-covid world could spark the next freight bull market if it coencides with a substantial loss of capacity from the current prolonged freight bear market?
Thomas M. Green
7mo
Fascinating data Jason Miller. Is there any indication that multimodal freight impacts the recent decline in miles? Or maybe you have the rail miles included in the dry van ton-miles? As the supply chain disruptions are easing, it is feasible to consider higher total transit times in return for lower total freight cost.
Tim Higham
7mo
Jason Miller - brilliant, as always. See my posts on TIA’s member survey numbers last week, anecdotal conversations at their annual event, and the continued disappointing results of the “bigger and brightest” in the industry (whom you’d think would be doing better based on their size and market power). As I told my entire team just yesterday…”we’re bobbling along the bottom and nobody knows how long it will last…so execute execute EXECUTE!” 😉🏆🙏 Tim at AscendTMS (TheFreeTMS.com) By InMotion Global, Inc.
Carlos Barahona
7mo
I find your info extremely insightful, Jason. Have we seen a period like this before in the last 10-15 years ( if you have the data) ?
Heidi Hornick
7mo
Full-load freight has ground to a halt. This makes last year look like the good times.
Stan Shoemaker
7mo
Jason Miller, maybe you should dive into Bidenomics because our commander in chief thinks everything is fine!
Jason Nesbitt
7mo
One of these days you are going to have bullish news to share :) I very much appreciate all the work, thought and predictions you put into your messages. You are one individual that I really look forward to reading content from on LI continually. Keep up the good work and get us some good news soon!!
Michael Sterling
7mo
I see your mention of Nearshoring looks overblown, but question on the import data. Is that only looking at sea freight(and I'd assume specifically container freight that can be cross docked or IM vs breakbulk), or does it include MX and Canada? Great post as usual!
Luke Winstrom
7mo
Macro lagging is catching up to reality.
Asset based supply chain solutions that deliver our Customer's Success while fueling growth through exceptional service
7moWith as slow as the TL freight market is, where are all the drivers? Still difficult to grow with good drivers. We added 10 this month, filling them is still difficult out there, especially in the upper Midwest. Local is easy, Home weekly or 2 weeks still difficult.