Trucking carriers reported continued weak demand and said more freight buyers are renegotiating their contracts.

For example, Covenant Transportation says in its first-quarter earnings report: "Trucking capacity continued to exceed demand, which allowed shippers to remain reluctant to increase freight rates or fuel surcharge reimbursement programs. Many shippers used bid processes to maintain downward pressure on freight rates."

In the first quarter alone, Covenant participated in 245 freight bid packages compared with 52 in the first quarter of 2007 and 595 in the entire year of 2007. Covenant says freight demand and trucking capacity will become more balanced later this year because "new truck orders have remained below the long-term industry replacement rate for several quarters and difficult operating conditions have increased the likelihood of trucking company failures."

Douglas Stotlar, CEO of firm Con-way said recently that "We believe pricing will remain under pressure for some time. We're operating in a challenging and uncertain economic environment, which continues to restrain demand and put pressure on pricing."

Truckload carrier Marten Transport's president and CEO Randolph Marten expects industry-wide capacity to exceed demand well into 2008. "Our goal is to continue to maintain our rate structure by focusing on profitable freight," he said.

Meanwhile, many truckers are taking vehicles off the road in an effort to balance capacity with lower demand. USA Truck's CEO Clifton Beckham said his firm reduced its fleet by 2.1% in the first quarter while JB Hunt Transport Services' CEO Kirk Thompson argues that the logistics industry is in the middle of "what may be recorded as the worst freight recession in a long time." That's why JB Hunt is moving away from an asset-based truckload model to a more variable cost structure model.

Truckload carrier Werner Enterprises said in an earnings statement that ongoing soft-freight market combined with high diesel fuel costs will eventually correct itself but not before many carriers go out of business. "An acceleration of trucking company failures combined with a low level of Class 8 truck builds may gradually improve the supply and demand balance in the truckload industry over the next few quarters," Werner officials said.