Truckload Market Update 2Q24

Fuel prices down amid increased production 

Diesel fuel prices are down following record domestic crude oil production levels. U.S. crude oil production averaged 13.3 million barrels per day at the end of 2023. From 2018-2023, the U.S. produced more oil and gas per year than any other country has ever produced. This boom may keep fuel prices stable if the trend continues through the year. 

Fuel prices continued down this path, with a quick spike in Week 7 associated with the unplanned outage at BP's Whiting, IN refinery. Increased domestic production is helping to push prices lower, although prices did rally towards the end of 1Q, increasing 1.6% overall or $0.65/gallon. Low fuel costs may provide some relief for carriers as they are accepting tenders with lower rates. 

Operating authorities down but much higher than pre-pandemic 

Active carrier authorities are continuing to fall, but there are still an estimated 95,000 more carriers in the truckload marketplace than before the pandemic: 37.4% more authorities than in March 2020.

Since March of 2023, net active authorities have fallen by about 24,500. This indicates that capacity may shift from independent carriers to large operators as smaller carriers start to exit the marketplace at a slow rate. These carrier departures could be escalated with a historically soft quarter in 2Q, but that remains to be seen. 

Upcoming events and trends

As 2Q takes shape, it's important to note upcoming trends and potential obstacles:

DOT Week is coming

The CVSA International Roadcheck, or DOT Week, is scheduled for May 14-May 16, 2024. Historically, this brings increased carrier costs and reduced capacity as many carriers take this week off to avoid operational delays due to roadside inspections. Watch out for any rate jumps, as carriers may temporarily exit the marketplace during this period. 

Retailers are shifting shipping strategy

According to the Federal Reserve Economic Database, retailer inventory levels have stabilized, with inventory to sales increasing to 1.33 in January 2024, up from 1.31 in December 2023. Destocking appears to be over, and retailers are beginning to shift back to a just-in-time inventory management strategy. Retailers are only stocking what they need and are avoiding overstocking their shelves. As retailers shift to this strategy, rates may be influenced by fewer extremes in demand. 

Understand the truckload marketplace to make better shipping decisions

At ArcBest, we know the importance of data for both shippers and carriers. With expert insight into the current truckload market, we're positioned to help you succeed no matter the current trends. With a full suite of transportation solutions for any shipper, including full truckload, contact us today and trust ArcBest with your future freight moves. 

New to shipping FTL? Learn about the nuances of truckload shipping through the shipper's guide to the truckload marketplace. 

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