The latest release of ACT’s For-Hire Trucking Index showed the Volume Index dropping into negative territory, at 48.1, in November, for the first time in 27 months (50 is neutral). The supply-demand balance turned down even further, hitting 45.2 on a seasonally-adjusted basis.

“Volume softened in November, after a strong October reading,” said Tim Denoyer, ACT Research’s vice president and senior analyst. “One of our friends in the industry indicated the weaker month was partly because his higher-paid drivers can now afford to take more time off. Pre-tariff shipping also appeared to take a breather in November, but still seems likely to require some payback early next year.”

Meanwhile, capacity growth accelerated amid strong retail truck sales. Denoyer commented, “The combination of a drop in Volume and rise in the Capacity Index loosened the supply-demand balance. The November reading shows the loosest industry balance since April 2016. We see this as a caution sign regarding rates in 2019. Accelerating Class 8 tractor production and slowing freight growth could continue to loosen the supply-demand balance as we head toward the 2019 contract rate season.”

The November fleet purchase intentions reading indicated another uptick in equipment demand, with 64.1% of respondents planning to buy trucks in the next three months, up from 57.2% in October. Denoyer noted, “After record year-to-date orders, this series should remain elevated as long lead-time truck orders are built and hit the highways.”