Freight Industry Recovery Could Extend Until 2025
🚛 Freight Industry Recovery Could Extend Until 2025.
Economic analysts predict that the freight market's weak conditions could persist until late 2025, based on the presentation of weak U.S. economic data at the Journal of Commerce Inland Distribution Conference. Factors such as saturated retail inventories, rising interest rates, and elevated costs continue to hinder the recovery of freight markets, despite some short-term positive signals in consumer spending. While a recession in the U.S. economy is not expected this year, growth will be slow, with GDP projected to grow by 2.3% in 2023 and possibly only exceed 1.5% in 2024. Higher costs for consumer staples and rising interest rates are expected to further impede spending, affecting manufacturing and, subsequently, shipping demand. Analysts also anticipate a typical peak season in 2023, following historical trends, but remain watchful for improvements in new home construction as a sign of economic recovery.
Phil Yeager, the CEO of Hub Group, highlighted ongoing financial pressures during the company's recent earnings call, pointing to a soft market mainly caused by an excess of truckload capacity that hasn’t yet exited the industry.