Carrier Capacity Rebalances Further In Q1
The trucking market might be starting to rebalance after a period of rapid growth. Data from the Federal Motor Safety Carrier Administration shows a recent decline in trucking companies shutting down, suggesting a potential market correction. However, this doesn't necessarily mean smooth sailing ahead.
Image: Monthly changes of active additions (grants and reinstatements) compared to exits (revocations) in operating authority, via Trucking Dive.
While exits have slowed, the overall number of trucking companies remains significantly higher compared to 2020, hinting at lingering overcapacity.
Additionally, companies leaving the market aren't necessarily gone for good. Some may be restarting under new names, contributing to the ongoing truck glut. This highlights a limitation in the available data, which only tracks companies entering and exiting, not the size of their fleets.
Despite these uncertainties, the trucking industry desperately needs a change. Carriers and drivers are yearning for better rates to recover from the boom-and-bust cycle triggered by the COVID-19 pandemic.
Unfortunately, freight rates haven't risen significantly even with the possible rebalancing. The oversupply issue and competition for rock-bottom prices continue to be major hurdles. Only time will tell if this is a genuine shift towards a healthier market or a temporary blip.