After what some industry insiders hailed as a two-year slump, increased freight activity appears to indicate that 2024 could be a banner year instead of a so-called “freight recession.”
“We definitely saw great improvement from the third quarter to the fourth quarter that was ahead of what we would have expected seasonally for those quarters,” ArcBest finance chief Matt Beasley reportedly said.
ArcBest, the parent company of ABF Freight, also indicated primary contract transport rose by 8 percent in January compared to the same period in 2023. The month also signaled the most significant year-over-year rise in container imports over the last seven, according to reports. Truck transportation prices ticked up, which hadn’t registered gains in nearly six months.
Much of the movement appears to be driven by retailers swelling inventories following a lengthy spell of maintaining stock minimums. These unanticipated improvements are expected to be a boon for freight carriers and truckers. Demand typically generates more competition for qualified CDL holders and pushes salaries upward.
“The fact that inventories have been drawn down so much, hopefully, a day is coming where there’s a little bit more mindset for growth,” Knight-Swift Transportation Holdings chief executive David Jackson reportedly said.
The national economy improved by a seasonally adjusted average of 3.3 percent during the fourth quarter of 2023, according to the U.S. Department of Commerce. ArcBest, parent of trucking heavyweight ABF Freight, pointed out its primary contract orders were up by 8 percent compared to the same period last year.
Along with these positive signs that truck transportation work will continue to improve, the Logistics Managers’ Index for January also suggested positive signs. The Index, which measures inventory activity across warehousing and freight sectors, showed two consecutive months of positive metrics. It had dipped to 49.4 in November, then measured 50. 6 in December and 55.6 in January.
If those numbers continue to trend upward, they could rival the 2023 high-water marks of 57.6 last January and 56.5 in October. It’s also important to note that last month’s Index stood 10 points higher than July’s low.
“I think we are bouncing along the bottom, and hopefully, we’re about to bounce off the bottom,” Covenant Logistics president Paul Bunn reportedly said. “It’s going to be probably a U-shaped recovery.”
J.B. Hunt Transport Services president of freight, Shelley Simpson, reportedly went on the record indicating the organization enjoyed better than expected earnings, after reportedly issuing warnings of an impending “freight recession.”
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