Weathering the Storm


Although this has been one of the wettest years in recent history, another storm has been brewing in 2019. A combination of a soft market, increased regulations, and higher operational costs has resulted in an alarming amount of carrier closures/bankruptcies.

Not only have the smaller 5- to 25-truck operations been heavily effected, but several large 500+ truck operations could not survive. Most notably, Falcon Transport, New England Motor Freight, and LME to name a few.

Just over a year ago, many of these companies experienced record profits. In fact, trucking capacity couldn’t keep up with the historic load volumes during the first half of 2018. Many experts thought a new bar had been set for freight rates across the board. However, this freight frenzy wouldn’t last long.

According to Freight Waves, from June to October 2018, tender rejections were cut in half from 25.6 percent to 13.8 percent. In many markets, these declines have continued into 2019, which is sign of what many are calling a “freight recession”. Until the demand can meet the supply, spot market rates will remain flat. Although it may get a bit worse before it gets better, it’s hard not to believe that the industry has tumbled to the bottom of the recessionary trough.

There are some signs that point to a slight uptick in demand recovery. Class 8 truck sales continue to fall and with sudden closures/bankruptcies of carriers, capacity will eventually tighten slightly. For now, however, carriers will just have to weather the storm.

If you are a small to medium size trucking company struggling in today’s economic climate but not looking to close your doors please Contact ARL Network to learn more for ways that we can help. (800-245-4722 x 402).

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