More freight carriers are exiting the market as soaring diesel prices drag on truckers

• The number of carriers exiting the market rose in September and hovered near record highs seen in the second quarter.
• That's according to Motive, which also found that new carrier starts headed back down. 
• Soaring diesel prices this summer have raised financial stress for carriers, the report added.

The freight slowdown that followed the pandemic-era delivery boom saw brief signs of relief in August, but the latest numbers suggest the downturn is still in effect, according to a report from Motive, a fleet operations platform.  

In September, the number of carriers exiting the market rose, moving toward the record highs seen in the second quarter this year. The decreases seen in August, Motive said, were likely an anomaly. 

"At the same time, new carrier starts saw a 10% drop, which also brought it back in line with Q2 and the overall decreases we've seen in 2023," the report said. "When the market will return to a level aligned with demand relies on external factors like diesel price fluctuations and interest rates."

Diesel prices eased from March to June, but then spiked 18% from July to September. That jump corresponded with financial stress for companies.

The national average for diesel prices on Monday hovered at $4.456, AAA data shows. While prices surged over the summer, they are still down from $5.271 one year ago.

"Financial stress, which is measured as the change in payment delays for carriers, saw tight correlation with these swings," Motive said. "For every 50 cents diesel prices increased in 2023, Motive saw a 30% increase in companies' financial stress."

Motive anticipates diesel prices to stay volatile for the year ahead, and consumer demand will have to stay level or even grow to match the freight market's capacity and help it stabilize.

"The capacity glut created in the aftermath of the pandemic's spending boom is still here, and current economic conditions aren't showing signs of that changing," Motive said.