The latest release of ACT Research’s For-Hire Trucking Index, with June data, showed a slowing in volumes, pricing moderating at a high level, and a still-strong supply-demand balance.
Carter Vieth, research associate at ACT Research, said, “June’s Volume Index reading declined, but continues to represent a still-healthy level, following an upwardly revised May, and with continuing lean U.S. inventories, durable goods orders rising to record levels, and consumers enjoying record wealth and savings, the fundamentals of the freight cycle remain clearly positive.
“As volume growth declined, ACT’s For-Hire Pricing Index also moderated at a high level, ending six months of consecutive increases. That said, June’s reading is the eighth best since the survey’s inception in June of 2009. Developments in the driver market and freight volumes will be key to the near-term rate outlook. While spot rates may come under pressure from driver re-entry, underlying equipment capacity tightness supports a positive contract rate outlook.”
Regarding the supply-demand balance, Vieth said, “While the bloom is off the rose in terms of the astronomical reading from a year-ago, June’s print continues to establish a new plateau that only looks weak in comparison to that year-ago period. Class 8 retail sales are constrained by tight inventories and unmet production demand due to parts shortages, so equipment capacity is lagging demand. With some structural driver issues likely to outlast the pandemic and a generally positive freight outlook, we do not expect the market to loosen too quickly.”
The ACT For-Hire Trucking Index is a monthly survey of for-hire trucking service providers. ACT Research converts responses into diffusion indexes, where the neutral or flat activity level is 50.
The ACT Freight Forecast provides forecasts for the direction of truck volumes and contract rates quarterly through 2020 with three years of annual forecasts for the truckload, less-than-truckload and intermodal segments of the transportation industry. For the truckload spot market, the report provides forecasts for the next twelve months. In 2019, the average accuracy of the report’s truckload spot rate forecasts was 98%. The ACT Research Freight Forecast uses equipment capacity modeling and the firm’s economics expertise to provide unprecedented visibility for the future of freight rates, helping businesses in transportation and logistics management plan for the future with confidence.
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