There are at least some signs business conditions could be beginning to improve after what's been an exceedingly difficult past year and a half for many owner-operators. That was the overall message of owner-operator business services firm ATBS Vice President Mike Hosted during Tuesday's mid-year benchmarking online session and market update. If not improving already, Hosted said, then at the very least "we’ve hit the bottom and we’re stable right now" when it comes to freight rates and overall volumes.
In addition to recent months' modestly improving monthly net income and income-per-mile measures, shown in the chart above, Hosted pointed to other indicators backing up his observations throughout the ATBS session. In spot rates and load-to-truck ratios in recent months he sees more volume coming into the market relative to the number of carriers operating there. "It's a good indicator the trucking market is balancing out," he said. "We should be stable with rates going forward, I think."
If that ends up being true, he added, the spot market seems to have made a bit of a correction to account for post-pandemic cost inflation. Among the many slides in his full presentation, Hosted shared the following chart showing two bottom points reached in prior cycles, in 2019-2020 and in mid-2016. Current lows, he believes, are unlikely to get lower, a "new floor," if you will, he said, higher than in prior cycles.
“I don’t know that we’ve ever seen freight demand fall this far so fast and for so long without an accompanying economic recession.” --Knight-Swift CEO David Jackson during a recent investor call. Hosted flagged the quote during his presentation though underscored his and others' view that the worst may be behind us.