COLUMBUS, Ind. — Growth is making its way into the for-hire market, according to the latest release of ACT Research’s For-Hire Trucking Index.
Volume Index
In a Nov. 27 statement, ACT analysts shared that the Volume Index rose 7.4 points in October — up to 56.9, seasonally adjusted (SA), from 49.5 in September.
“The rebound in volumes m/m may be tied to recent port and hurricane disruptions, but broadly speaking, freight demand trends are gradually improving,” said Carter Vieth, research associate at ACT. “The economy continues to exceed expectations, and notably in Q3, durable goods spending rose 8.3% q/q SAAR.”
Vieth says unease over the future actions of the International Longshoremen’s Association (ILA), which briefly halted work at ports along the U.S. East and Gulf coasts in early October.
“Threat of another ILA strike on January 15 has likely caused shippers to pull freight forward, and with tariffs on the horizon following the election, the pull-forward in freight is expected to accelerate further,” he said.
Capacity Index
Meanwhile, ACT’s Capacity Index dropped by 1.1 points m/m to 49.7 in October, down from 50.8 in September.
“While slowing growth from private fleets is helping to ease pressure on for-hire carriers, eight quarters of weak profitability point to capacity additions occurring at replacement levels,” Vieth said.
“U.S. Class 8 demand is softening, indicating that tractor fleet growth — a key reason this cycle is the longest on record — may soon be coming to an end,” he said. “However, further declines are needed for capacity to start tightening.”
Supply-Demand Balance
As freight volumes increased and fleet capacity decreased, the Supply-Demand Balance increased in October to 57.2 (SA), from 48.8 in September.
“Private fleet expansion, which is not captured in this indicator, has resulted in a longer period with the market close to balance than in past cycles,” Vieth said. “Slowing US Class 8 tractor sales in recent months are further rebalancing and moving the cycle forward, albeit slowly.
“Continued strong U.S. economic growth is leading to improved goods demand and will make its way to the for-hire market as private fleet growth slows,” he concluded.
Linda Garner-Bunch has been in publishing for more than 30 years. You name it, Linda has written about it. She has served as an editor for a group of national do-it-yourself publications and has coordinated the real estate section of Arkansas’ only statewide newspaper, in addition to working on a variety of niche publications ranging from bridal magazines to high-school sports previews and everything in between. She is also an experienced photographer and copy editor who enjoys telling the stories of the “Knights of the Highway,” as she calls our nation’s truck drivers.
