ACT Research’s For-Hire Trucking Index continues to suggest growth is making its way into the for-hire market. The volume index increased 7.4 points in October to 56.9, seasonally adjusted, 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,” Carter Vieth, research associate at ACT Research, said. “The economy continues to exceed expectations, and notably in Q3, durable goods spending rose 8.3% Q/Q SAAR. 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.”
The capacity index decreased by 1.1 points month over month to 49.7 in October, 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. However, further declines are needed for capacity to start tightening.”
The supply-demand balance increased in October to 57.2, from 48.8 in September, as freight volumes increased and fleet capacity decreased.
“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 U.S. 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.”
