Freight market update: Q4 – November 2023

November 15 / US
Freight market update: Q4 – November 2023

November market update: Key insights and recommendations for shippers and carriers

Published on November 15, 2023

The US GDP increased by 4.9% in Q3. However, this was mixed news for freight. Consumer spending, imports, and exports all rose in the third quarter. Meanwhile, the private residential investment remained flat, and inventories rose.

Additionally in October, the labor market softened and the manufacturing economy continued to contract at a faster pace. Over the last year, more than 90K carriers have had their authorities revoked, resulting in a net decrease in the carrier population of 20K. However, despite the recent capacity reduction, truckload spot rates saw a new cycle through.

Supply / demand indices

Truckload demand rose 0.75% in September for the third consecutive month. Meanwhile, supply only rose 0.2% due to a slight increase in long-distance truckload employment, as some of Yellow’s employees likely found jobs among truckload carriers. On a quarterly basis, demand was up 0.4% in Q3, while supply was down 0.3%.

The gap between our supply and demand indices remains near historically high levels, but seems to be closing, indicating that tightening might be underway, or that the market has at least found the bottom. This gap has been strongly correlated with dry van spot rates, which have been decreasing despite rising demand and stagnant supply.

Spot rates

Dry van spot rates (including fuel) were mostly flat in October, and 12% lower y/y. Linehaul rates (excluding fuel) fell by about 2 cents/mile from September’s levels, in line with seasonal expectations. If typical seasonality holds, we expect rates to rise by 4 cents/mile in November, and 9 cents/mile by December. Rates were on average $1.10/mile lower than the same time in 2021, and only 6 cents/mile higher than October 2019.

Diesel prices fell slightly in the last week of October, ending the monthly average at $4.51/gallon, 5 cents lower than September’s average.

Freight demand

Freight demand indicators were generally positive in September, as real consumer spending, manufacturing, and wholesale sales (in select truckload-specific sectors) all increased.

Aside from September’s partial recovery in housing starts, other early indicators of future demand were weaker. September’s increase in spending came at the expense of lower savings, which fell by 0.6%. Manufacturers’ new orders of core capital equipment were mostly flat (adjusted for inflation), and imports increased, but at a slower rate than seasonal expectations.

Freight supply

Driver employment

Trucking employment shed 5K jobs in October after adding 13.4K jobs in September. September’s strong gain in hiring was most likely due to Yellow’s employees finding jobs among other carriers. Trucking employment was 1.7% lower y/y, mostly skewed by a large drop in LTL employment, which fell by 14.2% y/y following Yellow’s bankruptcy.

Meanwhile, employment in the long-distance truckload sector was 2.1% higher than a year earlier on easy comps (as September 2022 saw a temporary drop in long-distance truckload employment of 13.5K employees).

Carrier population

The Federal Motor Carrier Safety Administration (FMCSA) authorized only 4,859 new trucking carriers in October, the lowest monthly count since June 2020. Weak spot rates and high diesel prices are among the top barriers facing potential carriers, as well as existing carriers which continue to exit the market at a rapid pace. Carrier authority revocations rose to 7,433 in October, resulting in a net decrease in the carrier population of about 2.6K in October. Between October 2022 and October 2023, the carrier population decreased by more than 20.5K carriers, the sharpest decline in the history of this data.


North American carriers are still adding to their Class 8 fleets despite the soft market. In September, net truck orders rose by 67.4% m/m, but were still 38.8% lower y/y. This increase in orders was not completely demand driven. In 2022 and 2023, September likely saw a supply-driven surge, as OEMs opened their orderboards for the upcoming year.

While net orders rose in September, truck production and sales both declined. Truck builds fell by 4.2% m/m, and sales fell by 5.3% to their lowest level since November 2022. The active Class 8 tractor population in the US has grown by 3.8% over the last 12 months, but is only expected to grow by about 1.7% in 2024.

In the US, the sleeper truck market saw similar trends. Net orders rose by 187% in September (from 3,606 units in August to 10,335 units in September), but were still 53% lower y/y in 2023. Sales and builds of new trucks fell by 11% – 12% in the third quarter, and were also 10% – 11% lower y/y.

Q4 market update: Key insights and recommendations for shippers and carriers

Published on November 8, 2023

Heading into the busy holiday season, truckload demand and capacity appear to be normalizing, nearshoring activity to Mexico is rapidly escalating, and LTL tailwinds have arrived. Shippers and carriers must be nimble as they make critical decisions to keep their supply chains moving forward into the new year.

Uber Freight’s Q4 Market Update and Outlook Report analyzes the most pressing trends across the industry to inform key decisions for the holidays and the year ahead alike. Here are the top takeaways as we head into Q4:

Truckload demand turned positive year-over-year for the first time in 9 months​

After hitting the bottom in April 2023, truckload demand has slowly but surely increased over the course of the year. In Q3, it rose by 1.2% and was flat year-over-year. Demand has turned positive for the first time in nine months with the truckload market likely beyond the bottom.

Normalized capacity also seems to be within view as new entrants recede and existing carriers manage their headcount. We anticipate low rates and rising operating costs will put more pressure on carriers, accelerating the rate of supply correction. 

When it comes to truckload employment, we observed a +13,400 increase in September, likely as a result of Yellow’s drivers flooding the trucking market. Although trucking employment is flattening out, large fleets may not continue to absorb excess capacity from failing carriers and owner-operators in the coming months. We expect long-distance truckload employment to drop 3% to 5% year-over-year based on lower carrier revenues and profit margins. 

Shippers should take advantage of abundant capacity to secure low rates ahead of continued market volatility, but remain cautious towards overly aggressive rates, which could jeopardize their service in case the market tightens next year.

Nearshoring activity is driving shipper volume to Mexico

The Mexican government published a new decree in October granting incentives to companies planning to relocate operations to the country. This decree has the potential to attract an additional $18.5 billion in investments in 2024 – a sign that nearshoring to Mexico should be top-of-mind for shippers.​ The main sectors that will benefit from these new policies are automotive, aerospace, agroindustry, pharmaceutical, and electronics. 

The new companies setting up shop in Mexico will require capacity. Communication between shippers and their primary carriers will be key to exploring dedicated fleet options and negotiating volume and rates for 2024.​ It’s a good time for shippers to take advantage of the current soft market. ​

Before the year is over, the holiday rush will also impact nearshoring activity. Carriers may experience operational delays due to weather conditions and driver vacations. We may see a slight rate increase in the spot market in upcoming months due to these variables – meaning shippers should start planning ahead and securing capacity now.

LTL tailwinds are here, following Yellow shutdown

Yellow’s terminals and equipment will be finding a home soon​. Yellow owned approximately 12,000 tractors and 35,000 trailers, and they’re currently working with key carriers to absorb this remaining volume. 

At the same time, individual carriers’ tonnage showed signs of improvement in September due to Yellow’s closure. The LTL market had the excess capacity to absorb Yellow’s volume with relatively few disruptions. ​However, overall LTL tonnage and shipment count is expected to remain at reduced overall levels through the end of the year and into 2024.​ 

With an expected 3-6% contractual increase heading into 2024, shippers should continue to work with their logistics partners to ensure long-term success. Shippers can make the most of their LTL shipping by unlocking network and carrier collaboration, origin optimization, timely freight payment, pricing strategy, and packaging improvements.

How shippers + carriers can head into the new year with ease

Shippers and carriers looking to close out the year with a bang will need to hone in on optimizing their supply chain strategies. Working with a trusted logistics partner can help them secure low rates ahead of continued market volatility, take advantage of the nearshoring boom and incentives that come along with it, and tap into logistics technology to navigate continued LTL volatility.

For a comprehensive outlook of what shippers and carriers can expect in the coming months, see our full Q4 Market Update and Outlook Report here.

*All data is generated by Uber Freight internal indices using a weighted combination of truck and driver availability for supply, and manufacturing output, goods consumption, imports and exports for demand.

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