Optimism. That’s what the majority of brokers are spouting for the near future.
The recently released Bloomberg | Truckstop semi-annual freight broker survey shows brokers remain relatively optimistic about their prospects over the next six months despite possible weaker demand, falling rates, and increased competition.
"Despite fewer spot opportunities and moderate economic activity, brokers remain fairly optimistic, with about 61 percent [of those] surveyed expecting demand growth over the next six months," commented Lee Klaskow, Senior Freight Transportation and Logistics Analyst at Bloomberg Intelligence. "Freight-broker sentiment is becoming less bleak as spot-rate conditions might be nearing a bottom and an economic soft landing may be achievable."
Some of the highlights from the Bloomberg | Truckstop broker survey of the first half of 2023 show:
- Brokers have a glimmer of hope on demand: About 46 percent of respondents said volume fell in 1H-23 (the first half of 2023) compared with a year earlier, or about 12 percentage points higher than in our survey six months earlier. Though more reported lower demand, the magnitude of declines averaged about two percent compared with last year. About 35 percent of respondents said 1H volume rose, driven mostly by newer broker businesses gaining share or customer-specific developments.
- Spot rate sentiment bounces off the bottom: Spot rates, excluding fuel surcharges, have fallen 31 percent since peaking at the end of 2021 and are down 13 percent from last year’s levels. Brokers have become more optimistic about the outlook, with the drop in rates appearing to be near the bottom. About 46 percent of those surveyed expect spot rates to rise over the next three to six months, 18 percentage points better than the 2H-22 (second half of 2022) survey, which marked a low in sentiment.
- Brokers feeling better about gross margins: About 37 percent of respondents had a lower gross margin in the 1H than a year earlier, or eight percentage points higher than our previous semi-annual result. Despite the declines, brokers remain optimistic about gross margin expansion this year, with 54 percent expecting a widening over 2022 levels.
"Truckstop is committed to delivering innovative products that provide brokers with the highest quality carriers for the right load, at the right time, during all market conditions," stated Kendra Tucker, the Chief Executive Officer of Truckstop. "It’s imperative that we continue to equip brokers with the tools they need to find coverage, meet capacity, and increase profits."
Truckstop brings carriers, brokers, and shippers together to move freight more easily and maximize your profits. More information can be found at https://truckstop.com.
The Bloomberg | Truckstop survey of freight brokers provides timely channel checks into the market’s health. The most recent sample size was 184 respondents, consisting of freight forwarders, third-party logistics providers, broker agents, as well as asset- and non-asset-based brokers. Most respondents (61 percent) have one to 50 employees. Of those surveyed, broker agents made up the biggest group (34 percent), followed by non-asset-based brokers (28 percent) and third-party logistic providers (22 percent).
The complete survey is available to Bloomberg Terminal subscribers via Bloomberg Intelligence.