Is This The End of The Freight Recession?

Reliance Partners’ Chief Revenue Officer, Thom Albrecht, recently shared his expert insights on the potential end of the freight recession during an episode of What the Truck?!? hosted by Dooner. As we approach 2025, Albrecht offered predictions about the trucking market’s recovery and the factors shaping its trajectory.

The Path to Market Recovery

Earlier this year, Albrecht forecasted a turning point in March 2025, signaling the end of the freight recession. His projections, which suggested carriers would move beyond merely scraping by, are increasingly supported by emerging data. Recent developments indicate the freight market may approach equilibrium even earlier than anticipated.

“Pre-election, the market would have been close to equilibrium around October or November,” Albrecht noted. “My bet was March 2025. The election just about guarantees it will be no later than March, and we’ll be rocking and rolling from then.”

Impact of the Presidential Election

The recent presidential election added a layer of uncertainty to the supply chain. With Donald Trump re-elected, the potential for new tariffs has prompted shippers to pull freight forward to mitigate financial risks. This strategic move could lead to an increase in freight activity in the short term, though the long-term effects depend on consumer demand.

“We’re seeing a lot of commentary about freight pull forward due to tariff uncertainties,” Albrecht explained. “In the short to intermediate term, there will be more freight activity, whether the recession is over today or early 2025. It’s in the process of dying if it hasn’t already died.”

Balancing Opportunities and Risks

Albrecht cautions that while the market is nearing equilibrium, the full recovery will take additional time. He likened the shift to flipping a switch, with equilibrium serving as a precursor to robust growth. “That flip usually occurs 4-6 months after equilibrium has been attained,” he said.

Shippers managing excess stock amid mediocre consumer demand face critical decisions. Should they continue pulling forward freight to meet projected demand, or could this lead to overstock and potential financial write-downs?

Tariffs: The Carrot and Stick Approach

In discussing Trump’s approach to tariffs, Albrecht highlighted the duality of his strategy. “The stick is the threat of tariffs, but the carrot is the potential for a lower corporate tax rate,” he said, referring to Trump’s proposed reduction from 21% to 15%. This dynamic could create opportunities for businesses while pressuring them to align with trade policies.

Looking Ahead to 2025

Albrecht remains optimistic about freight creation in the coming year, especially with faster economic growth on the horizon. However, he warns of potential pitfalls: “If underlying demand remains mediocre, then after the pull forward there could be another freight hangover.”

The freight industry is poised for significant changes in 2025. With recovery on the horizon, businesses must navigate market uncertainties while capitalizing on opportunities for growth.

Check out the full article from our friends at FreightWaves. Click here to read more.