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Survey shows rebalancing of owner-operator market

Aug. 10, 2022
Study from Bloomberg and shows how owner-operators have reacted to the volatile spot market as well as inflation and record fuel prices.

Recession and inflation concerns are weighing on the profitability of carriers in the spot market, according to the latest survey of owner-operators from Bloomberg Intelligence and The outlook for volume and growth has been less optimistic over the past three months but shows a rebalancing of the owner-operator market.

“Spot rates have been extremely volatile over the past 12 months and bullishness has started to wane among carriers,” said Lee Klaskow, senior freight transportation and logistics analyst at Bloomberg Intelligence. “But we believe current conditions will force a balancing in the market and lead to rate stabilization.”

See also: Diesel down nationally below $5 per gallon

The Bloomberg/ survey shows:

  • Volatility weighing on owner-operators’ psyche: About 53% of respondents expect load growth over the next six months vs. 73% in Q1 and 64% in 2Q21. Flatbed carriers were most optimistic (57% expect higher volume), followed by dry van (53%). Carriers expressed increased demand concerns over inflation, especially the impact of surging fuel prices on consumers. Not all were gloomy, with many noting demand felt “normal” after the unsustainable peaks last year.
  • Carriers become bears on spot rates: Spot rates excluding fuel surcharges have fallen 21% since peaking in late December, which has weighed on sentiment. Only 43% of carriers expect the rates to rise in the next six months, the lowest level since the first quarter of 2020. About 25% of carriers expect a drop over the next three to six months.
  • Carriers pumping the brakes on demand: Total demand softened in the second quarter among truckload carriers, with 62% of respondents noticing the drop from Q1 and about 47% saying volume growth was down from the same time last year. About 84% of carriers who focused on dry-van loads saw volume declines from the second quarter of 2021, followed by reefer (77%) and diversified (41%).
  • Carriers are feeling the full brunt of higher fuel costs: 96% of carriers cite fuel costs as the biggest inflationary pressure affecting the profitability of their businesses. About 81% of our respondents believe they will continue to face inflationary pressures for the next six months.

“We know that fuel costs and inflation concerns weigh on the profitability of carriers operating in the spot market,” Truckstop CEO Kendra Tucker said. “That is exactly why we continue to provide customers with mission-critical software that keeps their business moving forward and profitable, even in a down spot market.”

See also: Survey points to exodus of small operators—and fuel costs as the culprit

The sample size was 140, consisting of dry van, flatbed, temperature-controlled, and specialized/diversified carriers. Of the respondents, 65% operate just one tractor.

The complete survey is available to Bloomberg Terminal subscribers via Bloomberg Intelligence (BI).

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