The latest release of ACT Research’s for-hire trucking index suggests the supply-demand balance between the fleet and freight is narrowing. The volume index decreased 5.5 points in June to 48.9, seasonally adjusted, from a Roadcheck-assisted 54.4 in May.
“Volumes have been fairly flat this year, but they’ve improved to ‘less worse’ on a y/y basis, with the index averaging 48.8 through the first half of this year, versus 42.8 last year. Even with consumers under strain, real U.S. retail sales are up 1.8% YTD, and further disinflation helps support our outlook on real income growth,” Carter Vieth, research analyst at ACT Research, said. “Additionally, intermodal and import volumes are trending positive, which minimally adds to overall surface freight volumes. Private fleet insourcing has likely taken away some for-hire demand, but the recent softening in U.S. Class 8 tractor sales indicates a slowing in private fleet growth.”
Overall, truckload volume data remain mixed, with the Cass Freight Index and DAT spot loads still at cycle lows.
The capacity index increased by 3.6 points month over month to 49.3 in June, from 45.6 in May.
“Though the index increased m/m, this month’s reading marks the 12th month in a row capacity has been below 50, the longest streak of decline since the inception of the survey in late 2009,” Vieth said. “Fleet capacity contractions occurring at a slower rate suggest the supply-demand balance between the fleet and freight is narrowing. Given the duration of this downturn and the still-weak fundamentals, it’s hard to see capacity turning positive in the coming months, especially as the U.S. tractor sales trend continues to sag.”
The supply-demand balance fell in June to 49.6 (seasonally adjusted), from 58.7 in May, as freight volumes decreased and fleet capacity increased.
“Private fleet expansion, which is not captured in this indicator, is resulting in a longer leadup to higher market rates than in past cycles,” Vieth said. “With capacity an issue, overall equipment purchasing trends will remain key to watch. Continuing demand-side freight growth should provide ongoing support to the market balance.”
