While not the only factor at work, severe weather has kicked the freight cycle into a new stage in recent months, with rates spiking as capacity was frozen, according to the latest release of ACT Research’s Freight Forecast: Rate and Volume OUTLOOK report.
“Capacity contraction from low new equipment demand is also playing a part, so the reversion from weather should see rates fall to a new, higher floor. Aside from weather, freight demand conditions still aren’t wonderful, but received a modest boost from recent tariff changes,” Tim Denoyer, vice president and senior analyst at ACT Research, said.
“With retail inventories lean and a later Lunar New Year this year, we expect freight demand to improve after a soft March and April. But capacity contraction in terms of both equipment and drivers will be challenging to reverse,” Denoyer said. “In seasonally adjusted terms, dry van truckload rates held up remarkably in February, ending the month above where they started, even as the market has opened back up. Downward reversion is nearly assured as weather warms, but the supply-driven tightening is currently pushing TL contract rates up in the mid-single-digit percentages for the first time in over four years.”
