A big blue-chip market data firm chimed in with a report on Friday that spot rates in the trucking industry are falling sharply on prices.

ACT Research released a 56-page report on the drop in freight costs, driven in part by a slowdown in demand for durable goods. These low rates will be a “growth force in 2023,” Tim Denoyer, vice president and principal analyst at ACT Research, said in a statement.

Denoyer said, “Although we are reducing our forecast for truckloads and suppliers, we believe the bottoming process is beginning as spot rates are now further below costs than ever before .”

Compared to 2021, diesel prices rose 44% in October, according to the Department of Energy. This is the most important factor in increasing the cost for trucking fleets. The cost of truck parts and repairs will increase by 2021, according to a July report from Truckstop.com.

Meanwhile, according to the FreightWaves National Truckload Index, spot rates are down 23% year over year.

‘Great Purge’ becoming more likely for small trucking carriers

This presents a challenge to small fleets and those working in the trucking industry. Spot rates fell sharply earlier this year amid rising gasoline prices.

Chris Tucker, owner of Winchester, Kentucky-based truck dealer Full Coverage Freight, predicted in June that the trucking industry would see a “massive purge” of smaller carriers. This means a lot of cash flow among owners – many of whom started their trucking business during the hot freight market of 2020-21.

FTR Transportation Intelligence, another leading freight intelligence firm, forecasted in its latest Trucking Conditions Index report that negative market conditions will last through much of 2023. The index has been negative in all but one month since February 2022.

“Trucking companies that managed their businesses well during the good times should remain healthy and outperform those that had relied on a robust market to remain afloat,” Avery Vise, FTR vice president of trucking, said in a news release.

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