VOLUME INDEX: 
The Volume Index increased 0.9 points in July to 49.7, seasonally adjusted (SA), from 48.8 in June. While improved from this time last year, for-hire volumes remain under pressure from private fleet growth. Broadly speaking, above-trend US economic growth has been positive for surface freight. ACT’s GDP-based freight composite rose 4.1% y/y in Q2, reflecting growth in the goods economy, imports, and inventories. Consumers remain under strain, and both the prospect of lower interest rates and election uncertainty suggest a slow near-term outlook. Private fleets are handling the growth for now, but as their expansion slows, volumes will return to the for-hire market.
With US tractor sales slowing and spot rates at a 40% discount to private fleet operating costs, the industry is on the cusp of tightening.
PRICING INDEX:
The Pricing Index increased 3.0 points in July to 51.8 (SA), the first time our index has surpassed 50 since July of 2022. Slowing capacity additions close to replacement levels and growing demand have helped rebalance the market the past few months. However, US tractor sales jumped in July as mirror supply improved, whereas below-replacement levels are required for rates to move higher. Following an extended freight downturn, any easing in price pressure is surely welcome. And with better seasonality on the horizon, improving spot dynamics should result in higher rates.
While we see modest positive momentum for freight rates in the coming months, the extent to which excess capacity was added into a weak freight market the past year and a half suggests a gradual recovery looks likely.
CAPACITY INDEX: 
The Capacity Index decreased by 1.1 points m/m to 48.7 in July, from 49.8 in June. This month’s reading marks the 13th month in a row capacity has declined, the longest streak since the inception of the survey in late 2009. Fleet capacity contractions have slowed recently, suggesting the supply-demand imbalance between the fleet and freight is narrowing. Given the duration of this downturn and the nearly two years of challenged profitability, it’s hard to see capacity turning positive in the coming months, especially as US tractor sales trends slow, as reflected in the low levels of fleet purchase intentions below.
US Class 8 is softening, indicating that tractor fleet growth—a key reason this cycle is the longest on record—may soon be coming to an end, though further declines are needed for capacity to start tightening.
DRIVERS:
The Driver Availability Index increased to 53.1 in July, from 50.0 in June. July was the 26th month in row the index has been at or above 50. Driver availability remains persistently elevated and far from a shortage, partly supported by older drivers sticking around to help with higher living costs, and partly by the rise in migration in the past few years. The ongoing looseness in this index suggests the driver market is decidedly not in a shortage. A tightening in the driver market would help to spur the recovery in rates.
Driver availability has a long cyclical lag, and higher-paying construction and manufacturing jobs should provide more competition for drivers this year. Competition from higher-paying private fleets is also likely to press driver availability lower.
FLEET PURCHASE INTENTIONS: 
Fleet purchase intentions remain depressed, with only 37.5% of respondents saying they plan on buying new equipment in the next three months. Highlighting how tight fleet pocketbooks are, given the next few months kick off the opening of orderboards for 2025 and open order slots remain for 2024. Q2’24 marked the seventh consecutive quarter of y/y margin declines among publicly traded TL carriers, and with equipment ROI near impossible given current rates, purchasing delays will continue.
SUPPLY-DEMAND BALANCE:
The Supply-Demand Balance increased in July to 51.1 (SA), from 49.0 in June, as freight volumes increased and fleet capacity decreased. Private fleet expansion, which is not captured in this indicator, is resulting in a longer period with the market close to balance than in past cycles, but recent slowing in US Class 8 tractor sales will help to further rebalance and move the cycle forward. Above-trend US economic growth leading to modest goods demand growth should soon make its way to the for-hire freight market.
Disinflation and lower interest rates support the consumer outlook, as rising goods demand and a turning inventory cycle has resulted in improved import volumes. Private fleets handling an increased share of volumes has been the sticking point keeping the for-hire market in the doldrums, but this won’t last forever.
PRODUCTIVITY INDEX: 
(miles/tractor)
Fleet productivity rose 1.6 points m/m to 50.1 (SA) in July, consistent with this month’s increase in the Volume Index. Productivity has been challenged by private fleet pressure in the for-hire market but will gradually improve with volume increases and continued capacity decreases.