Dive Brief:
- The trucking market showed signs of rebalancing in capacity, where a negative trend turned positive in March, per Federal Motor Safety Carrier Administration data.
- The metric compares the number of trucking firms exiting their own businesses versus those that kept or gained their operating authority. Revocations reflect when a carrier loses or suspends its ability to carry interstate freight.
- The change is just one monthly snapshot, and a similar situation occurred in March 2023, FTR VP of Trucking Avery Vise said on a LinkedIn post. But the data revealed "interstate carrier exits slowed significantly," DAT iQ Principal Analyst Dean Croke said on a weekly market update.
Recent snapshot shows additions outweighed exits
Dive Insight:
Entrances and exits are just one piece of a puzzle to help understand how the trucking market is impacting rates, Croke noted at the Mid-America Trucking Show in March. Demand is still needed to meaningfully drive a rise in rates.
Overall totals in capacity from the start of 2020 showed further leveling of grants, which had been outpacing revocations for most of the past three years. Since January 2020, cumulative grants in operating authority totaled over 345,000, whereas exits remained slightly lower.
Since the start of this year, though, business exits have again taken over the lead, a trend that’s held for each month in Q1. The switch could be signaling a shift in the market.
Cumulative revocations eclipse grants in 2024
But reinstatements have been chugging along at this time, and with those supply dynamics, overcapacity continues to linger. According to analysts, exits are still slowly trickling out of the system, and several trucking leaders previously said that overall exits were slower than expected.
While industry leaders have relied on these types of monthly entrance and exit figures to get a sense of trucking's capacity, analysts note the data can fail to capture reductions and expansions in fleets because the information doesn’t show how many trucks belong to one operating authority.
Carriers and drivers are still yearning for better rates following the boom and bust cycle of the COVID-19 pandemic.
Even with dismal rates, though, many struggling carriers will take rock-bottom prices, and overcapacity still persists, said Joe Rajkovacz, director of government affairs and communications for the Western States Trucking Association.
