Inventories continue to increase as consumer demand stagnates. Although consumers are spending approximately 8% more on retail than last year, real retail sales — adjusted for inflation — are 1% lower year-over-year, according to “2022 Q4 Market Update & Outlook,” a new report from digital freight brokerage service Uber Freight.

Supply continues to expand as the market adds more trucks and drivers. Fleets over-hired during the past year, Uber Freight said. The fastest growth occurred among long-distance truckload employment, which saw a record year-over-year increase — 9.3% — in July. Carriers now are bidding on more volume than in the previous 18 months while searching for opportunities and ways to attract and retain drivers and improve operating ratio.

Uber Freight said it expects intermodal volumes to decline this year by just over 2%. Looking at the fourth quarter of this year, there are few signs of a fall peak season, and experts are forecasting a mild recession in 2023.

Volumes and demand are in decline internationally, the company said. U.S. import cargo is continuing to be diverted to U.S. Gulf and East Coast ports as a result of uncertainty with International Longshore and Warehouse Union labor contract negotiations.

Air freight demand in Europe and North America also is declining. And rates dropped sharply in the third quarter of this year, Uber Freight said. The Baltic Air Index shows air cargo rates down 46% from Shanghai to North America compared to October 2021.

Truckload freight rates in Mexico, meanwhile, are still high compared to pre-pandemic levels, the company said. The market is starting to notice an increase in equipment availability, and most carriers are approaching shippers asking for volume.

Also notable for Mexico: The Mexican Chamber of Deputies announced a law initiative to ban double-trailer trucks across the country. The proposal has created concern in the transportation market, Uber Freight said, as many experts consider it could have negative effects on transportation costs, capacity and pollution emissions, and worsen current drivers' shortage situation.

Meanwhile, the supply balance in the Canadian market — including cross-border — has stabilized, with capacity now growing and demand softening in most markets, Uber Freight said. Rate levels, while more than 40% higher than a year ago, are more predictable, as carriers are adhering to recently contracted rates and the level of spot rates have settled.