Freight volumes, rates, and capacity continued their decline in April, according to the latest release of ACT Research’s For-Hire Trucking Index. The Trucking Volume Index, according to the index, weakened further in April, at 37.6 versus 44.6 in March. De-stocking contributed to the softness, although the 24% year-over-year decline in container imports in Q1 likely represents the worst of the de-stocking.
“A slowing in de-stocking would be a positive for volumes,” said Time Denoyer, vice president and senior analyst at ACT Research. “Inflation, while showing tentative improvement, continues to impact consumer spending power, with retail sales in real terms down 3.6% y/y in April. The slow start produce season may also be a headwind.”
The company noted that the Pricing Index’s slide continues, falling 2.7 points to 33.4 in April from 36.1 in March, making it the second lowest reading in the index’s history, with only April 2020 being lower.
“We believe the cure for low prices is low prices, and since October 2022 the DOT has revoked a net 11k operating authorities. While the pricing pendulum remains with shippers for now, the next capacity rebalancing has begun. With capacity slowing and set to decline later this year, rate trends should begin to recover as soon as traction on freight volumes is established,” Denoyer said.
ACT Research additionally found that the Capacity Index ticked down by 0.8 points m/m to 51.8 in April; still growing, but at a slower rate than in 2022. Improvements in equipment production and drivers, due to improvements in the supply chain and drivers seeking safe harbor in larger fleets, helped grow capacity for the past 18 months.
Denoyer’s analysis revealed that April represented the fourteenth consecutive month of negative performance in the ongoing series. To provide perspective, during the downturn from 2015 to 2016, the balance between supply and demand was unfavorable for 17 out of 19 months. Although the current situation still indicates a loose balance, the necessary conditions for a future rebalancing have been established.
