ACT Research: For-Hire Trucking Index reflects recovering freight market

ACT Research: For-Hire Trucking Index reflects recovering freight market

ACT Research says their survey data sows conditions are gradually moving in the right direction.

ACT Research’s latest For-Hire Trucking Index show the freight market gradually recovering, with December supply-demand balance (see chart above) tightening by 2.2 points to 54.2, but rising from 52.0 in November when adjusted for the season. The decrease in capacity was larger than the decline in volumes, ACT notes.

According to ACT Research, the main cause for the supply-demand balance improvement in the past five months has been capacity declines. ACT adds that this five-month positive string suggests a tighter market in 2024 after 17 months in a loose market balance, similar to the 2015-2016 downcycle, when the Supply-Demand Balance was loose for 16 of 19 months.

“With volumes stabilizing and capacity contracting, the for-hire Supply-Demand Balance has been signaling an impending increase in freight rates for a few months,” says Tim Denoyer, vice president and senior analyst at ACT Research. “Truckload spot rates are 12% above the seasonal pattern in January following the cold snap. While weather effects should revert in the coming months, freight is an outdoor sport, so the cycle will likely find a higher trajectory as the reversion happens amid tightening capacity and recovering demand.”

The fleet capacity Index decreased by 3.3 points m/m to 44.2 in December. ACT Research says for-hire capacity has contracted in seven of the past eight months, and decreased further as fleet purchase intentions cratered and driver availability fell further this month.

“Capacity is still being added industry-wide by private fleets, but declining U.S. Class 8 tractor sales indicate this phenomenon is starting to slow,” Denoyer added. “Unlike private fleets, for-hire capacity has been contracting, so as private fleet additions decline, tighter industry capacity should press rates up.”

The driver availability Index dropped noticeably, down 4.1 points m/m to 50.9 in December. ACT Research says the Driver Availability index has fallen 11 points in the past three months and reversing course after a year of record availability, culminating in the all-time high reading of 62.0 in September ’23.

“The quality fleets in our survey have been safe havens for owner operators for the past couple years, but market dynamics seem to have finally caught up with the driver market. While bad news for the drivers, it’s key to tightening the freight market. While weather is the larger near-term factor, driver availability is a critical longer-term factor also starting to help press spot rates up,” Denoyer concluded.

You May Also Like

ACT Research ups 2024 Class 8 production and sales expectations

Looking at demand, activity, orders and backlogs, ACT Research expects an Class 8 production and sales to rise for the first time since last July.

Trucking-Market-Industry-Report-Generic-sales-production-act-research

After holding steady on the forecast since last July, ACT Research has pushed 2024 Class 8 production and sales expectations up in February, as published in the latest release of ACT's North American Commercial Vehicle Outlook.

“In addition to an improving economic outlook, the decision to boost the forecast, despite near-term inventory risks, reflects the industry’s ability to more aggressively sell into Mexico and export markets, while maintaining strength in domestic vocational,” said Kenny Vieth, ACT’s president and senior analyst. “The 2024 market is atypically bifurcated: considerable strength remaining in U.S. and Canadian vocational markets and Mexico helps offset otherwise weak demand in U.S. and Canadian tractor markets, LTL excluded.”

Model year 2025 engines: What you need to know

Building on 2024 designs, heavy-duty diesel engine manufacturers remain focused on improving efficiency when looking at the 2025 model year.

cummins-volvo-detroit-engine-group-2024-2025
Daimler delivers two Freightliner eCascadia trucks to Goodwill

These are the first zero-emission, Class 8 trucks in Goodwill Industries of New Mexico’s fleet, and the first eCascadias operating in the state.

Daimler-Freightliner-eCascadia-Goodwill
ELFA data suggests strong start for new business volume in 2024

December’s new business volumes were up both year-over-year and month-over-month.

ELFA-MLFI-dec-23-strong-start-to-2024
When will the 2027 diesel engine pre-buy start?

Volvo Trucks’s Magnus Koeck shares his prebuy thoughts, talks 2023 market share and provides a 2024 industry outlook.

Volvo-Trucks-Market-VNL-1400

Other Posts

Volvo Trucks new VNL: Lineup overview

We dive into the VNL’s fuel efficiency, safety and take it for a spin.

volvo-vnl-truck
Nikola produced 42 Class 8 Nikola hydrogen fuel cell EVs in 2023

Nikola Corporation produced 42 and wholesaled 35 Class 8 Nikola hydrogen fuel cell electric vehicles (FCEVs) in 2023.

Nikola-FCEV-Class-8-truck-production-wholesale
Daimler begins leasing in Romania

The partnership with Raiffeisen Leasing now expands Daimler’s leasing program to 17 global markets.

Daimler -Truck-rental-Brazil
U.S. Bank Index sees largest-ever freight shipment volume drop

Year-over-year data shows Q4 2023 shipments were down 15.7%, while spending by shippers dropped 13.5%.

US-Bank-Truck-Freight-shipment-volume-historic-drop