The bugbear in the trucking capacity market in the near term could be insurance costs, FTR Transportation Intelligence Vice President for Trucking Avery Vise said in a webinar Thursday.
"It has the potential to change the market significantly," he says, pointing out steep increases in premiums over the last year. "If you look at where's it's been going over the past year and especially the past couple of months, this has the potential to knock out a lot of smaller operations more quickly than we are forecasting."
This repeat of a similar spike in costs in 2019 would, theoretically, continue wiping out the smaller fleets that flooded the market during the pandemic. That fall has mostly stabilized, Vise says, thanks to lower used truck and diesel prices and stable spot rates. The market is still up 93,000 carriers, net, since the beginning of the pandemic.
[RELATED: Truck order boom ends; June returns to seasonal range]
"We have not taken out anywhere near the number of carriers that we've added in," Vise says, with the weakest being the first to exit the market in a post-COVID normalization.
Spot rates are also encouraging smaller carriers to stay in the game, though Vise says he wouldn't read too much into a slight bump in rates in the past week; those he attributes to the July 4th holiday. He does see optimism in refrigerated spot rates — consumers still have to eat, Vise points out — with flatbed staying stable with some slight growth.
"We're solid but not showing any particular strength, either," he says.
Total truck loadings are heading for recovery, FTR predicts, but nothing particularly robust, with spot and contract rates both at or near bottom. The job market also looks stable, with no one particular segment showing strength.
[RELATED: FTR offers insight on May trailer order dip]
Larger carriers have seen some power unit numbers creep up, Vise says, with some tightness in the driver market. He says drivers are available, but they may not be the drivers fleets are looking for. CDL hiring is still high but stablizing. The takeaway, Vise says, is if there was a declining population in active trucks, hiring activity would accordingly decline.
"We're not seeing that," he says. "We have a very stable market with us."
