February Freight Market Brings Mixed Results

In February, the US freight market presented a complex scenario, with both new carrier registrations and carrier exits on the rise. This duality revealed a shifting landscape influenced by the global pandemic's aftermath and the economy's fluctuations in demand, growth, decline, and gradual recovery.

The entrance of new carriers, both domestic and international, into the trucking market in 2024 unveiled a vastly changed playing field compared to 2019.

These shifts provide an opportunity for established carriers to navigate the recovering market strategically. They can capitalize on promising trends, such as the potential for increased rates and demand, while preparing for challenges like rising operational costs.

Image: New interstate for hire carriers, 2019-2024, Motive.

Carrier Registrations and Exits on the Rise

The industry saw a departure of more than 4,000 carriers, a 10.3% increase from the previous month, likely due to spot market prices remaining at unprecedented lows, exacerbating business closures.

Conversely, the month also witnessed a 9% increase in new carrier registrations, totaling 8,675, despite being 11% lower than the same period last year.

This growth, building on January's positive trend, suggests cautious optimism among new entrants, as analysts anticipate rate improvements throughout the year, encouraging the steady rise in new carrier registrations.

Image: Change in Authorized For Hire Carriers, 2019-2024, Motive.

Sustained Demand from Big Box Retailers

In February, visits to the top 50 retail warehouses saw a modest 1.2% increase, indicating sustained retail demand across e-commerce and major brick-and-mortar stores tracking 2023 levels. Despite news of rising consumer prices, generally positive consumer sentiment appears to be driving this demand.

Sectors experiencing significant surges:
-Department stores, apparel, and electronics (15.6% year-over-year)
-Home improvement stores (14.6% year-over-year)
-Grocery and superstores (12.1% year-over-year)

In contrast, discount retailers and wholesalers saw a steeper decrease compared to January (4.5% year-over-year).

Image: Top 50 retailer warehousing index, Motive.

Outlook for 2024

Motive anticipates these trends will maintain in 2024, with the home improvement sector outperforming compared to last year. Furthermore, sustained consumer demand and improved spot rates are expected to create a more carrier-friendly environment starting in Q3 2024.