“Freight loads are looking to slow this year, but 2% growth is still a reasonable environment for truck operations,” he said. “What it doesn’t do is create pressure on capacity, which is what would be needed to improve the rate environment. A key focus will be whether the manufacturing sector can stabilize and begin to grow again. I believe it will, but it may still be a quarter or two before fleets start to benefit from that activity.”
Starks noted that the freight rate environment has deteriorated, but unless the market sinks further, trucking should expect to see contract rates begin improving in the second half of the year.
“Spot rates have been on a steady decline, but have recently turned back up and should show year-over-year increases sometime this summer,” he pointed out.
“The wildcard right now will be how fuel prices behave,” Starks emphasized. “If prices rise quickly, it could have a big impact on cash flow, especially for the smaller carriers. If that happens we would expect to see a jump in fleet bankruptcies, something that has remained at historic lows over the last year despite the headwinds that the industry has been facing.”
