Private fleet capacity additions, inbound insourcing and increased spot market presence have dragged out the for-hire freight downturn for at least a year, according to the latest release of the Freight Forecast: U.S. Rate and Volume OUTLOOK report by ACT Research.
“While the TL spot market continues to make gradual progress, seismic shifts in private fleet capacity are forestalling strong for-hire conditions,” Tim Denoyer, vice president and senior analyst of ACT Research, said. “We’ve been surprised at the magnitude of equipment overbuying over the past year, but Class 8 tractor sales are normalizing from a medium-term perspective.”
“Tractor sales were impacted by mirror supply in Q2, and briefly dipped below replacement in June, before surging in July as those vehicles were completed and delivered,” Denoyer said. “So, the industry still isn’t finished adding capacity. Even as lower equipment supply is increasingly likely, private fleet capacity additions remain a feature of the cycle in the near-term. In our view, this is a big reason for-hire demand remains soft, even as the near-record July import level is emblematic of growing consumer demand, the start of a broad restock and likely a decent peak season ahead.”
The DAT aggregate spot rate, net fuel, is at $1.75 in early August (seasonally adjusted), up marginally from $1.68 in Q4/23, and the seasonally adjusted load/truck ratio is currently 6.7:1. The DAT load/truck ratio is not a scale of 1 to 10. It can go way past 11. It reached the mid-teens in 2017 and early 2018 and the high teens during 2021, peaking above 20. The current 6.7 seasonally adjusted level suggests spot rates will continue to grind gradually higher.
