Trucking companies exit market as slowdown continues

The temporary dip seen in August was likely an aberration, Motive said. Also, the number of new carrier launches decreased by 10 percent, in line with the trends seen in the second quarter and the overall declines seen in 2023. A return to a demand-driven market will depend on external factors, such as fluctuations in diesel prices and interest rates.

Diesel prices have been highly volatile, with a decline from March to June followed by an 18% increase from July to September, in line with companies' financial stress. The national average price of diesel on Oct 16 was $4.456, according to AAA. Although prices spiked over the summer, they remain below the $5.271 recorded a year ago. Motive has observed a strong correlation between financial stress, as measured by changes in carrier payment delays, and these diesel price fluctuations. For every 50-cent increase in diesel prices in 2023, Motive observed a 30 percent increase in business financial stress.

Motive expects diesel prices to remain volatile in the coming year, and maintaining or increasing consumer demand will be critical to aligning capacity in the freight market and promoting stabilization. The overcapacity that resulted from the pandemic spending boom remains, and current economic conditions do not indicate an imminent change.