The year 2023 was a challenging one for those involved in the freight transportation industry. Here are some of the major forces shaping 2024.
Supply and Demand are Moving Toward Equilibrium
Many industry experts used the term Freight Recession to describe the state of the industry in 2023. There is no doubt that there was excess truck capacity in 2023, a carryover from the freight boom during the early stages of the pandemic. As consumers shifted their financial resources in 2023 from buying goods to purchasing travel and services, trucking companies expanded their fleets, creating the disconnect.
It is also clear that an uptick in inflation, caused by higher interest rates and a rise in the prices of food, gasoline and other products put a damper on demand. However, many citizens experienced an increase in compensation. Consumer spending remained solid and consumer confidence is high at the beginning of the New Year. The Freight Recession was really a Carrier Capacity Surplus, too many trucks chasing too little freight.
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