Overview
January saw robust U.S. job growth, and data revisions resulted in a December increase that was much larger than that reflected in the initial data. However, an annual data revision shows employment in freight-related sectors substantially weaker than previously indicated. Meanwhile, the number of active for-hire trucking firms fell sharply.
Employment situation
Payroll employment in for-hire trucking has been considerably weaker since mid-2022 than previously indicated, according to an annual benchmark reversion of the BLS data.
Although trucking added 2,400 jobs, seasonally adjusted, m/m in January, the small increase was from a December level that was 33,000 jobs below the figure BLS released a month ago.
Monthly BLS employment figures are based on sampling that might not fully reflect job changes, especially if the makeup of industry participants changes significantly. The annual revision reflects more comprehensive data derived mainly from the Quarterly Census of Employment and Wages.
The sharp downward revision was not surprising as BLS probably was unable to capture in real time the large number of small carriers exiting the market since early 2022. BLS likely overstated total employment because it captured the shift in capacity to larger carriers without fully accounting for the drop in smaller carriers’ employment.
Similarly, the benchmark revision released in early 2022 substantially increased the BLS prior estimate of payroll jobs in trucking. The BLS monthly survey likely had not fully captured the surge in new entry that had occurred during late 2020 and 2021.
All key trucking sectors saw a downward revision in BLS employment estimates, but local general freight trucking accounted for roughly half of the total change in trucking jobs.
BLS lowered the local general freight estimate as of November by 5.2%. The downward revisions for general freight truckload and LTL were 1.1% and 2.4%, respectively. BLS revised its estimate for long-distance specialized trucking downward by only 0.8%, but payroll employment in that segment is more than 5% below the February 2020 level.
Warehousing and storage also saw a notable downward revision with the revised December employment level 82,600 jobs, or 4.2%, below the figure BLS released last month. Employment was up by 5,500 jobs m/m in January, however.
Net revocations and new carriers
January saw the largest single-month drop ever in the number of active for-hire trucking firms as the number of newly authorized carriers remained low and the number of carriers exiting the market was the highest since May of last year. Most carriers entering and exiting the market are very small, operating only one or two power units.
Net revocations of trucking authority – revocations minus reinstatements – totaled 7,631 during January, which is the highest level since May 2023’s 8,839, according to FTR’s analysis of Federal Motor Carrier Safety Administration data. Timing likely boosted revocations in January and May, however.
Both January 2024 and May 2023 had five Mondays, which is significant because FMCSA issues far more authority revocations on Mondays than on any other day of the week. Although the first Monday of January was a holiday, FMCSA processed its usual large number of revocations a day later. Not all months with five Mondays see an extraordinary number of net revocations, however.
Meanwhile, the number of newly authorized trucking firms in January was almost 300 higher than December at 4,036, but the number of new carriers entering the market otherwise was the lowest since June 2020.
With net revocations partially offset by new carriers, the for-hire carrier population fell by 3,595, which is most ever in a single month. January’s decrease exceeded the prior record set in January 2023 by about 130.
Most carriers having their authority revoked in January probably ceased operation in December or November or even earlier. The revocation process takes 30 days once an insurer notifies FMCSA that a carrier’s liability insurance policy has been cancelled. FTR subtracts reinstatements from revocations to account for carriers losing authority ultimately getting it back after securing new insurance.
Spot metrics
Warmer temperatures and calmer weather last week relieved the pressure that had fueled spot rates during the prior week. Broker-posted spot rates for van equipment in the Truckstop system declined during the week ended January 26 (week 4), especially for refrigerated equipment.
The total broker-posted rate declined nearly 4 cents after rising 7 cents during the previous week. Dry van spot rates gave back about half of the previous week’s gain while refrigerated spot rates fell by about 50% more than they had risen the week before. Flatbed spot rates rose for the fourth straight week to their highest level since late July.
Total load activity eased a little more than 2% after rising about 4% during the previous week. Volume in dry van and flatbed spot was steady while refrigerated loads fell about 17%. Total spot volume was up just under 1% compared to the same 2023 week.
For more on week 4 spot metrics for truck freight, visit https://freight.ftrintel.com/spotmarketinsights.
Rail/Intermodal
The Service Transportation Board this week extended through the end of this year a requirement that all Class I railroads submit monthly employment data. The next reports are to be submitted by February 15. However, the board no longer will require railroads to submit the rail service and performance data that it ordered in May 2022.
The four largest Class I carriers – BNSF, CSX, Norfolk Southern, and Union Pacific – also will be required to provide detailed information by the end of February on their hiring and retention plans and to provide an update on their labor force targets. Except for CSX, those carriers also must continue to submit data about trainees in their monthly reports.
In announcing its decision, STB noted that the four largest carriers have increased overall workforce levels since May 2022 and have met most of the interim labor force targets they had set. Even so, employment at those carriers is still about 14,000 below pre-pandemic levels and has been basically flat for the past six months, the board said.
As for the service performance data, STB said that because data from recent weeks shows that service has improved since April 2022, “the Board does not see the need at this time to extend the service data reporting previously required in this docket.”
