February brought mixed signals for the U.S. freight market, as both new carrier registrations and carrier exits increased.
The entrance of new carriers (both from within the United States and abroad) into the trucking market in 2024 reveals a vastly changed landscape compared to 2019, according to data results from Motive. Influenced by the global pandemic, the U.S. economy has experienced fluctuations in demand as well as periods of growth, decline, and gradual recovery.
This means, new routes for importing goods into the United States are emerging.
The industry saw a departure of more than 4,000 carriers, a 10.3% increase from the previous month. This is likely due to spot market prices remaining at unprecedented lows, which exacerbated business closures.
Conversely, the month also saw a 9% increase in new carrier registrations, totaling 8,675, despite being 11% lower than the same period last year. This growth, building on January’s positive trend, suggests a cautious optimism among new entrants. Analysts anticipate rate improvements throughout the year, which seems to be encouraging the steady rise in new carrier registrations.
“The trend of moving production away from Asia has gained momentum, with a focus on both offshoring and onshoring strategies,” according to Motive CEO Shoaib Makani. “Mexican carriers importing U.S. goods have been some of the biggest beneficiaries of this, as the number of vehicles registered for cross-border shipping grew by 14.3% and the average fleet size grew by 11.3% in 2023. The market’s overall growth was 2.3%, compared to a U.S. trucking market that saw a 6.6% contraction.”
Key takeaways:
- Top 50 retailer warehouses saw a 1.2% increase in trucking visits in February as retail demand across e-commerce and major brick-and-mortar stores tracked 2023 levels.
- With news of rising consumer prices, generally positive consumer sentiment appears to be driving sustained demand for big box retailers. Motive’s Big Box Retail Index saw visits to warehouses for the Top 50 retailers increase 1.2% in February as demand across e-commerce and major brick-and-mortar stores tracked 2023 levels.
- Meanwhile, diesel prices reversed their recent decline, rising 3.1% month over month. In addition to international factors, recent weather-related disruptions and outages seem to have contributed to domestic production slowing and prices increasing.
- As consumer demand recovers in 2024 and more carriers and retailers invest resources in and around Mexico, this trend shows no signs of slowing down.
- Motive predicts that the second half of 2024 will be a more carrier-friendly environment. February data supported last month’s prediction that 2024 carrier registrations would outpace pre-pandemic levels by 10-20%. Meanwhile, sustained consumer demand, normalized restocking patterns, and potential improvement in spot rates show further positive signals for the trucking market.
