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    Home » Blog » Fuel. It’s 2022’s “F” word
    WHAT THE TRUCK?!?

    Fuel. It’s 2022’s “F” word

    Michael VincentBy Michael VincentJune 22, 2022No Comments2 Mins Read
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    This might be a good freight year if it weren’t for the historic levels of freight over the past two years and the rate of descent from those highs. The high levels and the period of time that the elevation lasted were significant factors in creating the intensity of the impact during this softening market. 

    The fact that this is the second-highest freight market in the past five years means nothing. It’s really just an interesting fact. 

    As the SONAR dashboard below shows, outbound tender volumes are at their second-highest level in five years. 

    SONAR chart of Truckload volumes seasonally 5 years

    Outbound tender rejections are higher than in both 2018 and 2019. But no one can find a load because there were 20,000 new authorities added to the system in one month. 

    Again, the relative rejection and capacity levels are meaningless. The context of the plateau we are dropping from is the catalyst for blood-letting.

    SONAR OTRI – outbound tender rejection index indicates the supply of capacity

    This is the third-tightest market and the second-highest volume market in the past five years.

    And, it sucks. Why? 

    The impact of the current cycle is determined by our reaction to the previous cycle.

    • 20,000+ new authorities
    • Investment in new equipment
    • Over-ordering of inventory, resulting in canceled orders
    • The Shanghai red light/green light game 
    • And much much more!

    Then there is the “f” word…

    Side-by-side widgets for comparisons within a SONAR dashboard

    Fuel. 

    Spot rates on the left of the SONAR chart above not only can’t keep pace, but they have also fallen off a cliff. 

    Meanwhile, contract rates, on the right, are up and stable. That’s good news for fleets as they can at least make some money with stable rates and a fuel surcharge table. 

    Note: Buying at wholesale doesn’t suck either.

    Oh, and there’s the economy, which is slowing and descending faster and faster. 

    The SONAR charts below show slowing orders for capital goods and consumers beginning to regain their delinquency status with credit card companies. 

    SONAR contains macroeconomic data
    SONAR consumer data sets

    All of these factors result in a less-than-stellar rebound in import TEUs from the latest shutdowns in China.

    SONAR Container Atlas provides insights into global trade

    Ah, Fuel!

    Read more articles from Michael “The Dude” Vincent 

    Peace and love.

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    Michael Vincent
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    34 years in this industry. I've learned a few things. There is always a way to screw up a shipment, always. Vacations are just remote work. Never pass up a bathroom. Conferences are marathons, not sprints. Your word and integrity are your greatest assets. Oh, and not everyone likes the Circle Jerks. Peace and Love.

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