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In 2023, we’ve experienced continued rebalancing following the economic surge driven by the pandemic and oversupply of capacity. These have shrunk and restrained the market. The trend is expected to continue into Q4 and early 2024, so carriers should adjust their plans accordingly.

  • Climbing diesel prices are causing more financial stress for carriers.
  • Carrier exits and new carrier starts trended back downward after brief improvement in August, but driver retention since 2022 has improved. 
  • The Motive Big Box Retail Index improved slightly, as retailers may be slowly ramping up at a higher rate than in 2022.
  • Motive still expects overall contraction of the market and relatively delayed restocking to continue through the holiday season and into early 2024. 
  • Safety on the road becomes an increased concern for carriers around the holidays, especially on December 23 when collisions can more than double.
  • In this economic climate, operational efficiency is one of the only things within a business’s control. Therefore, it will be the key to carriers having a happy new year.

State of Freight

  • Motive’s new Financial Health Index tracks financial health among carriers measured by payment delays and its correlation with fluctuations in diesel prices. 2023 has seen a strong correlation of higher fuel costs and increased financial stress.
  • Though the summer brought some reprieve, net carrier exits from the market have continued to increase through 2023. New carrier starts, which saw a pop during the pandemic and for a short time afterward, have also steadily decreased in 2023.
  • One metric that has seen improvement has been driver retention, where we have seen a 5% improvement from 2022 to 2023. Though overall churn remains a challenge, more drivers are staying put, particularly in industries like passenger transport, retail, and warehousing.

The market (and workers) are craving stability

With carriers consistently exiting the market, new carrier starts trending downward, and diesel price fluctuations driving financial stress, 2023 showed how impactful volatility can be for carriers. More drivers staying put indicates what they and the wider market desire: more stability, both in their operations and the overall marketplace. As carriers have continued to struggle with post-pandemic market shifts, it will be crucial that they stabilize operations as much as possible. This includes prioritizing operational efficiency and appropriate spend management for the busy holiday season and heading into 2024.

Diesel price swings are creating more financial stress

Diesel prices, one of the biggest input costs for carriers, saw major fluctuations in 2023. Prices gradually declined from March to June but then surged 18% from July to September. Financial stress, which is measured as the change in payment delays for carriers, saw tight correlation with these swings. For every 50 cents diesel prices increased in 2023, Motive saw a 30% increase in companies’ financial stress. As credit delinquencies overall continue to increase, this financial stress particularly impacts smaller carriers. They have not seen spot rates increase at the same rate as diesel prices and are seeing their revenues squeezed at a time when debt options are more limited. Since September, financial stress has improved somewhat in correlation with diesel prices falling, but this simply shows that businesses that can cope with the price fluctuations are able to stay afloat, while smaller businesses that can’t are more likely to be adversely affected