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Freight recession continues but upturn coming, ACT Research says

ACT Research maintained its view that truckload and intermodal contract rates will fall this year due to overcapacity and weak freight demand in its July installment of the ACT Freight Forecast, U.S. Rate and Volume outlook covering the truckload, intermodal, LTL and last mile sectors.

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David Sickels is the Associate Editor of Tire Review and Fleet Equipment magazines. He has a history of working in the media, marketing and automotive industries in both print and online.

Truckload-Rate-Gauge-7-12-19

ACT Research maintained its view that truckload and intermodal contract rates will fall this year due to overcapacity and weak freight demand in its July installment of the ACT Freight Forecast, U.S. Rate and Volume outlook covering the truckload, intermodal, LTL and last mile sectors.

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Tim Denoyer, ACT Research’s vice president and senior analyst, said, “It’s a good news/bad news report this month. The bad news is we’re in a freight recession and the factors we focus on tell us spot rates are headed still lower near-term, but that’s been going on for a while. The good news is that for the first time this cycle, we see evidence on the horizon for an eventual bottoming and upturn in spot truckload rates, thanks to low new truck orders and improving capital discipline from the trucking industry.”

Denoyer added, “The Truckload Rate Gauge is currently signaling significant overcapacity, favoring shippers in rate negotiations. But based on our expectation for a decline in U.S. Class 8 tractor build rates later in the year, the supply side should begin to improve.”

The Truckload Rate Gauge is ACT’s measure of industry supply/demand, balancing changes in the number of active trucks and the amount of available freight. The “Current” gauge gives a good directional feel for spot today and contract in about six months, and the “Six Months Out” gauge tells about spot in six months and contract in about a year, ACT says.

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The ACT Freight Forecast provides quarterly forecasts for the direction of volumes and contract rates through 2020 and annual forecasts through 2021 for the truckload, less-than-truckload and intermodal segments of the transportation industry. For the truckload spot market, the report provides forecasts for the next twelve months.

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