Private fleet capacity additions, inbound insourcing, and increased spot market presence have dragged out the for-hire freight downturn for at least a year, according to the latest release of the Freight Forecast: U.S. Rate and Volume OUTLOOK report.
“While the TL spot market continues to make gradual progress, seismic shifts in private fleet capacity are forestalling strong for-hire conditions,” shared Tim Denoyer, ACT Research’s Vice President and Senior Analyst. “We’ve been surprised at the magnitude of equipment overbuying over the past year, but Class 8 tractor sales are normalizing from a medium-term perspective.”
Denoyer added, “Tractor sales were impacted by mirror supply in Q2, and briefly dipped below replacement in June, before surging in July as those vehicles were completed and delivered. So, the industry still isn’t finished adding capacity. Even as lower equipment supply is increasingly likely, private fleet capacity additions remain a feature of the cycle in the near-term.
In our view, this is a big reason for-hire demand remains soft, even as the near-record July import level is emblematic of growing consumer demand, the start of a broad restock, and likely a decent peak season ahead.”
Our DAT aggregate spot rate, net fuel, is at $1.75 in early August (SA), up marginally from $1.68 in Q4’23, and the seasonally adjusted load/truck ratio is currently 6.7:1.
The DAT load/truck ratio isn’t exactly a scale of 1 to 10. It can go way past 11. It reached the mid-teens in 2017 and early 2018 and the high teens during 2021, peaking above 20. The current 6.7 SA level suggests spot rates will continue to grind gradually higher.
Freight Forecast Report Overview
The monthly 58-page ACT Freight Forecast report provides analysis and forecasts for a broad range of U.S. freight measures, including the Cass Freight Index, Cass Truckload Linehaul Index, and DAT spot and contract rates by trailer type. The service provides monthly, quarterly, and annual predictions for the TL, LTL, and intermodal markets over a two- to three-year time horizon, including capacity, volumes, and rates. The Freight Forecast provides unmatched detail on the freight rate outlook, helping companies across the supply chain plan with greater visibility and less uncertainty.
ACT Research Overview
ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.
Tim Denoyer, VP & Senior Analyst
ACT Research