Domestic Demand for Trucking Begins to Slip

The pandemic-inspired trucking boom could be coming to an end.

That’s according to a Wall Street Journal report Wednesday (April 13) that noted rates on trucking’s spot market have begun slipping, with analysts downgrading trucking companies as they prepare to post first-quarter earnings.

The report also cited the Cass Freight Index measure of domestic shipping demand, which rose just 0.6% between February and March, as a sign the market is in a slowdown.

Meanwhile, freight rates seem to be falling after recent record highs. Prices for last-minute spot loads in the truckload market — a small portion of the market, but still a good indicator of contract rate trends — have fallen as shipping demand lines up with available truck capacity.

Read more: Shipping, Logistics Costs Expected to Keep Rising in ‘22

Dry van truckload spot rates — excluding fuel surcharges — have fallen 37% since December and 27% in the past month, according to analysts at Bank of America.

BofA’s measure of trucking capacity available to shippers climbed last week to its highest level since June 2020, while its gauge of shippers’ outlook for freight rates fell sharply to the lowest level since July 2020

“I think it’s fair to say that the days of expecting rate increases are pretty much over,” Avery Vise, a trucking analyst at FTR Transportation Intelligence, told The Wall Street Journal. “It’s a question of just how quickly things are going to normalize. The idea that you can just sort of print money is over.”

This news comes just after a period in which the trucking industry was wrestling with a driver shortage. In 2021, the industry was down a record 80,000 drivers, according to the American Trucking Association, an industry trade group.

See also: Walmart Hikes Driver Pay, Launches Private Fleet Program

Last week, Walmart announced plans to give raises to its roughly 12,000 truckers, allowing them to earn $110,000 a year. The retailer had hired 4,500 truck drivers last year as part of a larger, nationwide hiring surge.