The latest release of ACT Research’s “For-Hire Trucking Index” suggests an approaching turning point in the freight cycle, but perhaps not as quickly as for-hire fleets would prefer.

The supply-demand balance surged to 55.6, seasonally adjusted, in August from 42.2 in July, in the first result above the neutral 50 level in 18 months. Improving dynamics on both supply (capacity) and demand (volumes) drove the upward inflection.

For context, in the 2015 – 2016 downcycle, the supply-demand balance was loose for 16 of 19 months.

The volume index notably jumped 12.3 points in August to 54.4, seasonally adjusted, from 42.1 in July. While an encouraging signal, the increase may not be indicative of a market turning point just yet.

“This is the highest result in 18 months, but our diffusion indexes measure the breadth of a signal, not the strength,” Tim Denoyer, vice president and senior analyst at ACT Research, said. “This month’s number indicates volumes picked up for a big number of fleets in our survey, but it wasn’t necessarily a large increase. So, we wouldn’t suggest this means the freight downturn is over, but it is a considerable ‘green shoot’ that suggests the retail inventory destock is playing out.”

The capacity index contracted further, declining 1.1 points to 48.9 in August, seasonally adjusted, as fleets reined in supply. This index has been below the neutral 50 level for three of the past four months.

“New Class 8 tractor sales are still near record levels, so while we observe capital discipline among for-hire fleets, we also think private fleets continue to grow,” Denoyer said. “Driver availability also remains extraordinarily good for the diverse group of for-hire fleets in our survey. In our view, this probably isn’t enough yet to turn the tide in the spot market, but the market rebalancing is progressing and this should be a good leading indicator of better times ahead.”