NEED HELP 
NEED HELP 
In the June edition of the State of Freight webinar, held live at the Future of Supply Chain conference in Atlanta, FreightWaves CEO Craig Fuller and Director of Market Intelligence Zach Strickland addressed urgent freight industry issues. Their discussion underscored the interconnectedness between the nation’s housing crisis, trucking capacity, and other critical factors influencing the volatile market, demanding immediate attention.
Housing Crisis Impact on Trucking
Craig Fuller emphasized the surprising link between the housing crisis and trucking. He revealed that some truck drivers live in their cabs full-time due to the lack of affordable housing, which has unintentionally kept some carriers on the road. Additionally, the slowdown in housing construction has reduced the number of construction jobs, which might have otherwise drawn drivers away from the trucking industry, thus maintaining capacity.
Brokers’ Role in Market Volatility
Fuller noted that large carriers have been losing market share to brokers, increasing market volatility. Brokers are enabling smaller carriers to survive by providing access to additional capacity, prolonging the market downturn. Fuller warned that this could make the current market slump last longer than expected.
Impending Bankruptcy in the Trucking Industry
Fuller predicted a significant bankruptcy within the trucking sector by the end of the year. He mentioned that a company with nearly 1,000 trucks faces severe financial difficulties, reflecting broader concerns about the industry’s economic health. With rising interest rates and deteriorating balance sheets, troubled companies may need help to secure financial support.
OTRI as a Market Indicator
Zach Strickland highlighted the Outbound Tender Rejection Index (OTRI) as a critical trucking supply and demand measure. Recent gains in the index suggest a return to more typical seasonal patterns in the freight market. Fuller echoed this sentiment, pointing out that the market’s reaction during Roadcheck Week indicates a shift towards historical norms, a positive sign after stagnation.
Rising Rates Amid Inflation Freight rates have been climbing, as shown by the National Truckload Index. However, carrier costs are also rising, driven by increased driver wages and equipment costs. Fuller explained that carriers are facing a higher cost floor, which could continue to strain their profitability despite the uptick in rates.
In summary, the freight industry is grappling with complex challenges, from the housing crisis influencing driver behavior to financial pressures that could lead to significant bankruptcies. As brokers continue to gain market share and rates rise amid inflation, the industry’s future remains uncertain.
