Trucking demand seems to be decreasing: Shippers' outlook on rates, capacity, and inventory levels are reaching levels not seen since the summer of 2020, when the pandemic lockdowns sent freight volumes downward.
In a recent note to investors, Bank of America Managing Director of Trucking Research Ken Hoexter wrote that shippers' view of demand is down 26% year-year while rail carloads are up 0.2% year-over-year this week. The bank's proprietary Truckload Demand Indicator hit 57.5 — the "fifth consecutive decline, and the lowest level since June 2020."
Bank of America's survey represented views of 40 shippers across the U.S. including retail, consumer goods, and manufacturing industries.
Shippers surveyed said that truck availability has improved and that truckload has passed an inflection point. Furthermore, product is also moving better than before, signaling that "fluidity has improved."
At the same time, the note indicated that commentary from shippers didn't address or show the concern about "end user demand falling as the demand commentary stayed somewhat solid."
Hoexter also noted that the shippers' view of rates over the next three months "melts down," trending downward to the lowest point since May 2020.
Shippers are finding it much easier to secure capacity to move their loads, with the outlook on capacity hitting the highest level since June 2020. They also noted their view on inventory levels "continue to rebuild." About 10% of shippers expect rates to increase from 16%, while 58% expect pricing to be flat —which is up from 48% from the last survey — while 33% expect rates to fall.
A few anecdotal examples from Bank of America survey can illustrate this data. One home furnishing shipper said available capacity increased at both rail and over-the-road truck carriers. Another home product shipper said flatbed availability has gotten a little bit better. A food products shipper said the market is shifting as brokers are making more cold calls and offering reduced rates.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv
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