There’s never a dull moment in the trucking industry, especially as consumer buying patterns have normalized after pandemic peaks. Of course, the current million dollar question is, “What will 2023 be like for the trucking industry?” While none of us know for certain what the next 12 months will bring, some market shifts over the last quarter have given us some indication of what to expect in the new year. With spot and contract rates coming back down to earth in recent months and a significant oversupply of shipping containers, 2023 is sure to be an eventful year.
Check out these five trucking trends to watch in 2023.
1. Diesel Fuel Prices
In a recent interview with the Commercial Carrier Journal, the head of energy analysis at Oil Price Information Service Tom Kloza predicted that diesel prices will decline in 2023 after hitting historic highs in the latter half of 2022.
“I expect that diesel will be quite expensive on a year-on-year basis in January and February, but prices in most other months should be $1.00/gallon or more beneath the numbers endured in this wild 2022,” Kloza said.
2. Spot Rate Rebound?
“To round out 2022, spot rates have been falling, edging closer to contract rate levels,” writes Paul Pfeiffer of Anderson Trucking Service. “However, this trend likely won’t continue in 2023. Instead, you should expect maintenance costs, insurance premiums, truck driver pay, fuel prices and the ongoing semi-truck shortage to level out spot rates at a contract rate floor, if they have not hit it already.”
Pfeiffer notes however that if inflation shrinks consumer demand, spot rates may actually decline further in 2023.
3. Contraction of Contract Rates
In a recent conversation with Fleet Equipment magazine, ACT Research President and Senior Analyst Kenny Vieth offered insights into what you can expect from contract rates in 2023.
“If spot rates are down 30 percent in the fourth quarter, contract rates are going to be down 10 percent to 15 percent by the time we get to the end of the first quarter,” Vieth said.
4. Class 8 Truck and Trailer Production
Sales of Class 8 trucks and trailers in November in the United States were the second highest of 2022, an increase of more than 14 percent year-over-year. ACT Research’s recently released North American Commercial Vehicle Outlook anticipates that this end-of-year demand for Class 8 equipment will continue into 2023.
“In line with expectations, the industry has witnessed a surge of Class 8 orders into year-end,” Vieth shared. “The resulting growth in order backlogs supports higher production and gives OEMs and suppliers good visibility through the first half of 2023.”
5. Ocean Freight Volumes
Multiple COVID-19 lockdowns in China and weakening consumer demand driven by inflation have pushed ocean container volumes down in November and December. FreightWaves’ Michael Rudolph expects ocean freight volumes to continue to fall in 2023, which will have an impact on the trucking industry.
“2023 does not hold much promise either, as sailings to the ports of Los Angeles and Long Beach — the nation’s busiest container port complex — are being canceled at an astonishing clip,” Rudolph said. “A perfect storm is brewing that will push any notable activity on the ocean to the second half of 2023 at the earliest.”
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