U.S. trucking firms see freight downturn reversing
The U.S. trucking industry is anticipated to experience increased freight demand in the latter part of the year, rebounding from a period of lower profits attributed to decreased package volumes. The optimism is fueled by positive signals from U.S. retailers regarding improved inventory positions and expectations of enhanced inbound container shipments. Retailers like Target and Macy’s have indicated successful resolution of inventory issues, with a focus on stocking up popular products for the upcoming holiday season.
The National Retail Federation predicts a narrowing drop in the volume of large containers handled by U.S. ports, signaling preparations for heightened demand during the year-end holiday period. Logistics firm XPO and Old Dominion Freight Line have observed positive shifts in shipment count and tonnage, suggesting an improved freight demand environment. This positive trend is expected to continue into 2024, according to XPO’s Chief Mario Harik.
The slump in freight demand last year, influenced by a return to in-store shopping and inflationary pressures on household budgets, led to a ripple effect on trucks and railroads. Despite the challenging second quarter, industry executives believe there is light at the end of the tunnel. Analysts predict a return to growth in the next year, attributing it to a combination of demand recovery, normalization of import volumes, and supply reduction.
The potential demise of Yellow Corp, the third-largest U.S. trucking company, is seen as a factor that could boost rates for competitors such as XPO, FedEx Freight, and Old Dominion, offering further support to the recovering market conditions.