2023 Trucking Forecast with Adam Wingfield
With 2022 coming to a close and 2023 just around the corner, we thought it’d be a great time to dig into what the last year has been like for truckers and carriers — and to discuss what might be in store for the trucking industry in 2023. We recently caught up with trucking consultant Adam Wingfield to get his take on 2022 and for his predictions about the upcoming year. Adam has spent the last 23 years working in the trucking industry, including stints as a company driver, owner operator and fleet owner. Today he uses his decades of industry knowledge to help small carriers and owner operators source capital, set up new businesses, manage fleets and dispatch, and establish best practices for long-term success through his company Innovative Logistics Group.
Year-End Review: Trucking in 2022
“In early 2022, we were still coming off the all-time high rates of 2021,” Adam said. “At the end of 2021 and into early 2022, we saw a shortage of used vehicles available, which increased used truck prices. The long term effects of high pricing in the used truck market is something that these owner operators and fleet owners are going to have to deal with for several years, especially if they financed their equipment. Folks that have been in trucking for a very long time know that rates go up and rates come down, rates go up and rates come down. In early 2022, we did see things start to turn as far as spot rates and volumes. As 2022 progressed, a lot of the folks that were not in the industry prior to the pandemic just weren’t ready for that dip.”
When sky-high diesel prices hit during the summer of 2022, most owner operators and trucking companies had to deal with the combination of higher fixed costs (such as truck payments) along with an increase in their number one variable expense, fuel. At the same time, the costs of truck repair, repair time and the increase in overall downtime due to parts shortages increased. Many truck parts were on backorder during 2022.
“I think when you put all of that into one big old bowl, it was almost a recipe for a perfect storm,” Adam shared. “What we’re seeing now is decreased engagement. Authority revocations are up. We’re seeing folks exiting the business and selling equipment. You’re seeing truck lots full of equipment that we didn’t see last year. Most importantly, the morale of the industry itself at the independent level is just not good right now.”
2023 Trucking Forecast
According to Adam, in order to predict what might happen in trucking in 2023, you have to understand what has caused freight volumes and rates to drop in 2022 — namely restocks. In much of 2020 and 2021, many manufacturers and retailers wanted to stock up and prepare themselves for the possibility of future supply chain disruptions and a prolonged pandemic. They wanted to ensure they had more than enough inventory should demand for goods remain at record levels. Now those manufacturers and retailers are sitting on that inventory as consumer demand has softened.
“If you’re looking at 2023, there are a couple of things that are still out there that are just question marks,” Adam said. “You’ve got the price of diesel fuel and whether we are going to see any relief in diesel fuel pricing. From what I’ve been reading and what I’ve seen with my clients, I don’t think it’s going to get too much better soon. I’m being cautiously optimistic that it doesn’t get too much worse, but we don’t know. When we look at truck pricing, we are now seeing normality. That’s good news for those folks that are getting started in the industry and that do decide to take that leap and get started as owner operators and independent carriers. The biggest question is about rates, especially in the spot market. Until we see some improved volumes and shift in supply and demand, we’re not going to see much lift in spot rate activity. I don’t have a genie in a bottle or anything, but I think we’re going to see much of the same going through the first quarter of 2023.”
Adam went on to say that it’s likely that volumes and rates will bottom out soon. Once that happens, he predicts a rebound of some kind, though what that will look like is hard to predict given all of the variables that influence overall volumes and rates. In the meantime, he’s advising his owner operator and carrier clients to prioritize technology investments that help them operate with greater efficiency.
“We’re seeing more small carriers move towards TMS solutions, which I think is a good start because a TMS solution is hands down one of the most important tools that you can possibly have, especially if you are a fleet owner,” Adam said. “A TMS gives you that back office. It gives you that insight to be able to see what’s happening from a holistic viewpoint. TMS is the biggest thing that we saw kickoff, but dash cam integrations and smart dash cam usage with AI integrations have been big, too. In 2023, behind the wheel technology is going to continue to be a major focus.”
