NASHVILLE — The March edition of the Motive Monthly Economic Report shows that February brought mixed signals for the U.S. freight market as both new carrier registrations and exists increased.
According to a news release, Motive’s Big Box Retail Index saw another 1.2% increase, with grocery, superstore, non-durables and home improvement retailers seeing the biggest gains.
“We anticipate these trends will maintain in 2024, with home improvement, in particular, outperforming compared to last year,” the news release states.
Mexican carriers importing U.S. goods see significant growth as nearshoring continues to ramp up, the report notes.
Motive predicts that sustained consumer demand and improved spot rates will create a more carrier-friendly environment starting in Q3 2024.
New carrier entries point to shifts in the trucking market; be ready to take advantage of it.
“The entrance of new carriers (both from within the US and abroad) into the trucking market in 2024 reveals a vastly changed landscape compared to 2019,” according to Motive. “Influenced by the global pandemic, the US economy has experienced fluctuations in demand as well as periods of growth, decline, and gradual recovery. New routes for importing goods into the US are emerging. Predicting future market dynamics can be challenging, but these shifts provide an opportunity for established carriers to navigate the recovering market. They can capitalize on promising trends such as the potential for increases in rates and demand, as well as prepare for challenges like rising operational costs.”
Motive reports that the U.S. trucking industry saw a departure of more than 4,000 carriers in February, a 10.3% increase from the previous month.
“This is likely due to spot market prices remaining at unprecedented lows, which exacerbated business closures,” according to the report. “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.”
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.
“While this week brought news of rising consumer prices, generally positive consumer sentiment appears to be driving sustained demand for big box retailers,” the report notes. “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. Sectors seeing significant surges included department stores, apparel and electronics (15.6% year-over-year), home improvement stores (14.6% year-over-year) and grocery and superstores (12.1% year-over-year).”
In contrast, discount retailers and wholesalers saw a steeper decrease compared to January (4.5% year-over-year).
“We anticipate these trends will maintain in 2024, with home improvement outperforming last year,” the report states.
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.
Motive CEO Shoaib Makani recently noted that the trend of moving production away from Asia has gained momentum, with a focus on both offshoring and onshoring strategies.
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 US trucking market that saw a 6.6% contraction.
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. Companies will continue to look to production and logistics in Mexico as a hedge against challenges to intercontinental shipping (such as ongoing international tensions).
Motive’s prediction: Consumer demand and improvement in rates will create a more carrier-friendly market in 2024.
“Motive predicts that by the second half of 2024, we will be in a more carrier-friendly environment,” the news release concluded. “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. We anticipate rates will have moved upward and consumer demand will keep its current pace in the second half of 2024, leading to fewer carrier exits in addition to the previously mentioned gains in net-new registrations.”
Born in Pine Bluff, Arkansas, and raised in East Texas, John Worthen returned to his home state to attend college in 1998 and decided to make his life in The Natural State. Worthen is a 20-year veteran of the journalism industry and has covered just about every topic there is. He has a passion for writing and telling stories. He has worked as a beat reporter and bureau chief for a statewide newspaper and as managing editor of a regional newspaper in Arkansas. Additionally, Worthen has been a prolific freelance journalist for two decades, and has been published in several travel magazines and on travel websites.
