Dive Brief:
- TL carriers, including Knight-Swift Transportation Holdings and Schneider National, project modest or moderate market improvement this peak season, executives said on Q2 earnings calls.
- That’s in contrast to strong seasonal uplift, where the less-pronounced bump includes a return of some typical seasonality, Knight-Swift CEO Dave Jackson said.
- The relief comes after multiple carriers suggested the spot market bottomed out, but the downturn is still leaving a lingering softness, Jackson noted. He added that although freight volumes haven’t normalized, consumer spending remains largely stable.
Dive Insight:
Despite the developing signs of relief, Q3 still has challenges ahead.
Imports are weaker than normal, some trucking businesses are aggressively trying to hold onto volume, inflation continues and softer Q1 demand pressured contractual pricing in Q2, Knight-Swift noted.
But carriers have reported positive signs, suggesting that destocking by retailers appears to be in the final stages. Carriers are also exiting the market, better aligning industry capacity. And some business parts are weathering the downturn with less severity than others, such as Schneider’s dedicated operations and Knight-Swift’s LTL segment.
Schneider noted that changes don’t have to be drastic for a better equilibrium to occur, EVP and CFO Stephen Bruffett said. But he added that he’d avoid describing the improvements with the word “recovery.”
“I’d say we’re cautiously optimistic,” Werner CEO, Chairman and President Derek Leathers said. “It’s difficult to say, but it appears to me that we’re seeing the early innings of what could set up more like a normalized Q4 with some difficult headwinds still ahead of us in Q3.”
