Another metric to consider is how much of JB Hunt’s, Fed Ex’s, or Walmart’s freight is being hauled by a third party. It may not be readily available, but I can see it through the Landstar agents electronc loadboard posts that handle those accounts. Sometimes one may find anecdotal evidence by watching to see if a different company other than FedEx, JB Hunt, or Walmart are pulling a FedEx, JB Hunt, or Walmart trailer, respectively. Except, of course, during the crazy Christmas season.
Right now, a significant driver of lower freight rates, lower load to truck ratios, and higher spot market rate to contract rate discounts is increased capacity. Additional capacity is still on it’s way as indicated by new truck order backlogs that are a year long. However, these backlogs will not last long as the cost of these new trucks with their higher operating costs will not be supported by current freight rates.
Trade volume reductions as implied by maritime’s Baltic Dry Index approaching five year lows is another issue facing trucking. In addition, JB Hunt is a heavy intermodal provider with their large fleet of overseas containers. Even railroads may start feeling lower volumes in earnest soon in spite of coordinated efforts to move more freight to the lower cost, environmentally and road traffic friendly rail system.
In my opinion, there is a very narrow window for the US to avoid a recession in the next 6 to 12 months. With no trade deal, we will need big bold moves in infrastructure, voluntary business capital investment, a very accomodative Fed to encourage consumer refinancing and their subsequent spending on goods and services in order to have a chance to stave off a recession. Increasing domestic oil exploration with its positive wide effect on multiple industries would not hurt either. Last I heard, Trump is now planning to visit XI. Hopefully they can work things out before business and consumer confidence unravels with subsequent economic and financial pain following.
Edited for spelling.
