CNBC today published the article linked below stating, "America's freight recession is nearing its end...with retail orders and rates headed higher." There are just a few problems: [1]: The article cites data from Motive showing truck visits to distribution centers of the top 5 retailers are up 30% year-over-year as evidence. While Walmart, Target, Costco, Home Depot, and Amazon are indeed large entities (assuming these are the 5 retailers mentioned), they are a small fraction of the overall freight market. And I highly question this figure's accuracy, as Census Bureau data aren't showing sharp increases in retail sales in these sectors to match. [2]: The article ignores that Cass's shipments data for June showed a steep slide to the worst reading in 4 years. Cass shipments is directionally very predictive of freight market dynamics. [3]: The article states, "Data across the retail sector shows year-over-year order increases through June, including at department stores, electronics, and apparel retailers with bricks-and-mortar locations (32.9%), home improvement (24.4%), grocery & superstores (22.1%), and discount retailers & wholesalers (13%)." These numbers can't be accurate nationally, as we aren't seeing increases in real sales or real inventories even close to these totals for these industries based on Census Bureau data. Implication: retail trade is NOT the primary driver of domestic trucking activity. Rather, its domestic manufacturing, and domestic manufacturing output continues to be weak. We are finally seeing signs that seasonally adjusted manufacturing output found a bottom in several industries in late Q1/early Q2 2024, but we still have a way to go before this freight recession ends for trucking firms. #supplychain #supplychainmanagement #shipsandshipping #trucking #freight https://lnkd.in/gAUpaa-Q
Ari Ashe
5mo
Plus isn't it true that consumer confidence is down and credit card delinquencies are up as interest rates rise and cost of goods outpace rise in wages?
Ryan Hammett
5mo
I was coming to LinkedIn to post something similar, so I'll just jump onto your post instead. Your point #1 was going to be my rant. Shipments in and out of 5 retailer DCs is not indicative of the full market and retail isn't even a top contributor to freight demand. To then go and make a market call based on such limited data felt really premature and overly confident. I really appreciated Shelley Simpson's comment "to be very cautious on the things that we say." As I just told a shipper "Rumors of the recession demise have been greatly exaggerated!"
Stan Shoemaker
5mo
Jason Miller, I am a firm believer that everyday we are one day closer!
A recession has been forecast to be a quarter away for 3 years now. Gotta be right sometime.
Scot Snyder, DML
5mo
My concern now is that our overall economy may be heading into a recession.
Kyle Lintner
5mo
"We now have fewer trucks on the road because of the bankruptcies and capacity exits”….. According to the latest FMCSA data, we’ve added 96,964 Class 8 for-hire trucks through the first five months this year. The current total of 2,690,694 is 596,316 more trucks than pre-Covid totals.
Bill Robinson
5mo
Jason Miller, you are aligned with Dean Cooke DAT. He stated DAT is seeing more postings than normal and gap between capacity and demand is closing. Challenge is rates are not increasing in line with more freight posted, hence more capacity has to exit for rates to increase.
CEO at RC Trucking Inc and Redding Transportation LLC
5moMy approaches typically come from common sense, real world experience in trucking which are normally outside the box and probably of a simpler thought process of more educated and admittedly smarter people than I. With that said, I think there is positive news in the report from the simple fact a recovery is now being discussed. Although the data shows, as presented, that the prediction may be a reach, there is at least something to be reached for now. And as a small carrier, that’s all I need to push forward. Most of us out here in the trenches are simple people chasing the American dream. Hope is what drives us to achieve that dream. So while I do agree the light at the end of the tunnel is not yet shining brightly, there is a glimmer. And that my friends is the glimmer of hope we are all looking for today.