There were more than enough trucking companies crashing and burning in 2023. But that does not necessarily mean professional driving jobs or the supply chain were ever in jeopardy.
When massive Yellow Trucking shut its doors, putting 30,000 employees on unemployment, the majority of truckers were able to pivot. Those unwilling to relocate or go OTR reportedly made other decisions. Although Yellow’s collapse garnered splashy headlines and may have been used to promote another freight “bloodbath,” a bidding war ensued over Yellow’s trucks, terminals, and other assets.
The results of recent auctions resulted in Yellow’s former rival LTL outfits cobbling up its real estate assets. The court-supervised sale of the majority of its holding pulled down $2 billion. Organizations such as XPO, Estes, and Saia took home the lion’s share. Yet another series of auctions has been scheduled to sell the remaining 25 percent of the 99-year-old freight carrier’s property.
Rather than look at Yellow’s self-inflicted demise as an indicator the freight-hauling industry is wallowing, consider how quickly other trucking operations were champing at the bit to expand. Old Dominion and Estes were reportedly willing to pony up more than the assessed value of Yellow’s terminals. Estes officials even went on the record saying they wanted the entire operation, employees included. Now comes early reports that freight carriers, owner-operators, and fleets are placing significantly high orders for new big rigs.
“Order levels were above the historical average but continue to follow seasonal trends, stabilizing our expectations for replacement demand in 2024,” FRT Chairman Eric Starks reportedly said. “Since the filling of 2024’s order boards began in earnest in September, Class 8 orders have been booked at a 413k (seasonally adjusted annual rate).”
According to FTR Transportation Intelligence data, orders for Class 8 trucks in both October and November outpaced those during the same months in 2022. November’s orders exceeded 36,000, compared to 255,000 for the previous 12 months. It’s difficult to dispute that truck transportation decision-makers are not seeing the prevailing economic winds change in their favor.
It’s also important to note that trucking outfits are ordering Class 8s at a time when interest rates are stingingly high, and the Fed is expected to start lowering them in 2024. Predicting trucking industry conditions is a lot like a weather forecast. However, 2024 appears sunny with scattered showers of truckloads.
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