What trucking execs have to say about the freight cycle

Leaders from Ryder System and Schneider National expressed optimism that the market could turn around this quarter or in early 2024.

Published November 14, 2023 • By David Taube

Trucking executives are ready for a market turnaround. During Q3 earnings calls, C-suite leaders provided some optimism that the freight cycle could turn this quarter or early next year.

Addressing investors and answering analyst questions, executives with Ryder System, Schneider National and Werner Enterprises noted potential improvements in the freight cycle, highlighting some encouraging signs amid ongoing market challenges.

Carriers have been struggling against sluggish consumer demand and murky forecasts, following retailers’ destocking in the wake of COVID-19 demand spikes. At the same time, some carriers continue to exit the market, bringing relief to companies struggling with elevated rates.

How much of a demand uptick the upcoming holiday season could bring remains unclear. A short-term forecast model in the dry van spot market suggested the boost may fall short of other projections in the freight market, DAT Chief of Analystics Ken Adamo noted on a Nov. 7 market update.

Here’s what top trucking executives had to say about the current freight cycle during Q3 earnings calls.

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Nov. 2, 2023

Schneider views 2024 as transition year

Freight market fundamentals could slowly improve next year, according to Schneider National's Jim Filter, EVP and Group President of Transportation and Logistics.

The carrier expects the cycle’s trough to be between the third quarter of 2023 through the first part of 2024, Filter said on the company’s Nov. 2 earnings call.

“We're currently viewing 2024 as a transition year with freight market fundamentals slowly but steadily improving, and that's barring a catalyst that could accelerate the pace of improvement, which could very much happen,” he said.

The sequential decline in pricing from Q2 to Q3 made this cycle’s sluggishness unique, and Schneider expected most but not all of the decline, he said. But despite the difficult pricing environment, the company is still solidly executing operations.

“Of all the freight cycles that have happened over the past 30 years, this one’s in the midst of what I would characterize as an overcorrection to the freight environment of the prior couple of years,” he said.

Nov. 1, 2023

Werner says deactivations easing pressure on the system

An overall exodus of carriers’ operating authority has continued for over a year.

As of Nov. 1, there were over 150,000 net deactivations, Werner Enterprises' CEO, Chairman and President Derek Leathers said on the earnings call. Those figures are based on Federal Motor Carrier Safety Administration data, and they mark 57 weeks where exits were greater than entries.

Leathers noted that indicator isn’t the only measure worth following, but it’s part of some encouraging signs in the market, he said.

While owner-operators and others may have complicated the picture initially, data from the last quarter and a half points to more exits, Leathers said.

“Then you couple that with now name brand bankruptcies, not the obvious Yellow that everybody's talked about, but 200 truck, 400 truck, 500 truck carriers kind of on a weekly basis starting to hit the radar of not being able to survive this pricing environment,” he said. “I think if you put all that together and you continue to look forward along that trend line, this is coming closer to balance than people realize.”

Additionally, more and more companies are indicating that destocking is largely behind them, Leather said, noting consumer confidence and behaviors will continue to steer the market.

Oct. 25, 2023

Ryder says freight cycle could bottom in Q4 2023 or Q1 2024

A bottoming of the freight cycle seems probable during Q4 2023 or Q1 2024, according to Ryder System.

The transport company is assuming soft conditions will remain through the middle of next year, CEO and Chairman Robert Sanchez said on an Oct. 25 earnings call.

“Things have continued to decline,” he said. “[But] as we get into the back half of next year, we would expect things to start to come back up.”

Across its customer mix, softness persisted with transports, apparel retail seemed relatively soft, and furniture and housing-related products were down, Sanchez said.

“But we do still see strength, and we did see strength in the CPG sector,” he said, also noting the company’s 3PL acquisition of IFS Holdings. “In automotive, we saw automotive production really strong in the quarter. And also in industrial. Industrial is a little bit of a mixed bag, but the industrial customers that we have still saw some good strength.”