The latest release of ACT Research’s For-Hire Trucking Index indicated supply and demand rebalanced somewhat in June, as volumes slowed a little and fleets began to respond to higher rates with more capacity.
The volume index decreased 1.8 points to 65.9 seasonally adjusted in June, down from a cycle high of 67.7 in May. June’s result was in the top quintile of our nearly 17-year survey, and as emphasized by the sharp decline in the driver availability index, this has so far been largely a supply-driven recovery.
“Industrial demand has improved with data center investment, and while consumer demand remains soft, falling energy prices and fewer tariffs should support some inventory restocking in the coming months,” Carter Vieth, research analyst at ACT Research, said. “For-hire volumes should continue to benefit from growing capacity constraints even in a broadly soft demand environment. Vocational and flatbed markets are among the strongest areas for demand.”
The capacity index increased 1.5 points month over month to 55.0 (seasonally adjusted) in June from 53.5 in May, a 43-month high.
“While capacity at large is declining — Class 8 tractor sales remain below replacement — the pendulum swing back to for-hire carriers and the rapid acceleration of freight rate improvement the past three months is sending the expansion signal to carriers, especially among larger, well-run fleets like our survey respondents,” Vieth said. “Capacity expansion should pick up further in Q3/Q4 as spot rate gains flow through to contract rates, and carriers sate pent-up demand to replace aging equipment with one eye on EPA’27.”
The supply-demand balance dropped to 60.9 (seasonally adjusted), down from 64.2 (seasonally adjusted) in May, as volumes slowed a little and fleets began to respond to higher rates with more capacity.
“Freight demand has improved materially for the quality fleets in the survey this year, as capacity has been pinched and data center investment accelerates,” Vieth said. “Despite a sluggish goods economy, the capacity correction is creating for-hire trucking demand, and a retail inventory restock has likely begun. Capacity is responding positively among our survey participants. While enforcement of new regulations continues, driver availability ticked up, as record driver pay packages are announced.”
