ACT Research: Slow Going on Truckload Cycle Bottoming Process
NOV 21, 2023 - 7:00 am
According to ACT Research’s latest Freight Forecast, U.S. Rate and Volume Outlook report, freight markets are expected to continue bouncing along the bottom in the near term, with some holiday volatility and a change in trajectory on the way next year.
“We see retail sales turning back to real growth this holiday season after over a year of declines. The acceleration in real disposable income growth as inflation slowed sharply this year and the ongoing strong labor market support a recovery in goods demand. The end of destocking, rise in imports and recent easing in oil prices improve our confidence that peak season will end on a higher note for freight demand,” Tim Denoyer, vice president and senior analyst at ACT Research, said. “But although private fleet capacity expansion continues to pull freight from the for-hire market, we think equipment purchasing patterns are changing, which should propel the freight cycle forward in 2024.”
Spot load postings remain low, and while spot equipment posts have declined, the rebalancing of capacity is making little net progress, with the industry still adding capacity. Slowing Class 8 tractor sales — recent selling rates are already down 20% from the record first half of 2023 level — means fewer new additions, and the pace of fleet exits remains historically elevated, so the removal of overcapacity is gaining momentum under the surface.
“With freight volumes broadly starting to pick up, the spot market is still loose heading into winter, but we expect the trajectory of rates to shift in 2024,” Denoyer said.
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