While demand trends are mixed and the outlook remains cloudy, capacity continues to contract, as discussed in the latest release of the Freight Forecast: Rate and Volume OUTLOOK report by ACT Research.
“Class 8 tractor production is on track to decline about 35% from 1H to 2H this year, to a rate several thousand trucks per month below what is needed to maintain the fleet size. In our view, lower capacity in an otherwise stable demand environment could move the cycle forward and actually create for-hire demand by reversing the insourcing of recent years. But this will take time,” Tim Denoyer, vice president and senior analyst for ACT Research, said. “The recent trends in our ACT Driver Availability Index suggests the driver market is no longer loose, but not yet tight. This index, from a survey of medium and large fleets, needed to fall below 40 the last two cycles before rates responded. The new rules on nondomiciled drivers could tighten driver capacity over the next one-to-two years, but heavy truck tariff costs are starting to constrain equipment capacity.”
