ACT Research: TL Contract Rates Turn Lower with More to Go



ACT Research released the November installment of the ACT Freight Forecast, U.S. Rate and Volume OUTLOOK report covering the truckload, intermodal, LTL and last mile sectors.

Based on ACT’s For-Hire TL Carrier Database, TL contract rates fell to $2.28 per mile in Q3, down 2% y/y, following a 3% increase in Q2.

Tim Denoyer, ACT Research vice president and senior analyst, said, “We’re seeing evidence that a bottoming process is beginning in the truckload cycle from truck order and survey data. It will be gradual, but we think spot rates will turn positive in mid-2020. Meanwhile, for-hire freight volume continues to be soft, pressured by ongoing private fleet capacity additions, so we don’t think we’ve seen the worst of the contract rate pressure yet.”

He continued, “We caution not to jump to the conclusion that capacity is tightening because of carrier failures. Those are not unusual in this business and the fact is US fleets bought more new Class 8 tractors in September than any month in history. So, capacity is not yet tightening, and build plans are still above replacement for the next six months. Rather, roughly 10k net new tractors were added to US highways in September, mainly by private fleets.”

Freight has softened since the September 1st tariff imposition, due in part to the temporary strike at GM, and declines have broadened to every major rail category except petroleum. As GM ramps production back up, the major declines in Q4 to-date rail volumes should moderate somewhat.

The ACT Freight Forecast provides three-year forecasts for volumes and contract rates for the truckload, less-than-truckload and intermodal segments of the transportation industry, and for the truckload spot market, the report forecasts the next twelve months.


Like this story? Begin each business day with news you need to know! Click here to register now for our FREE Daily E-News Broadcast and start YOUR day informed!

Leave a comment

View Latest Digital Edition

Terry Mulreany
Subscriptions: 800 708 9373 x130
[email protected]
Susie Angelucci
Advertising: 484.459.3016
[email protected]

View Latest Digital Edition

Visit our sister website for news, information, exclusive articles,
deal tables and more on the asset-based lending, factoring,
and restructuring industries.
www.abfjournal.com