The rebalancing of trucking capacity begins

The rebalancing of trucking capacity begins

Although the production of new equipment is still high, hiring and fleet exit patterns indicate that capacity is gradually decreasing.

Freight demand will likely be soft for some time, but nascent capacity removal will be key to rebalancing, according to ACT Research. ACT points to slower declines and wider spreads between specialized and dry van rates this year and notes that a lot of rebalancing must take place to turn the proverbial ship.

“Spot rates are now about 17% below truckload fleet operating costs in Q2, worse than the 15% operating loss in Q1, by our estimates,” shared Tim Denoyer, vice president and senior analyst, ACT Research. “Failures started to pick up when the loss reached 10% in Q4’22. This was a record at the time, and we see Newton’s third law of motion at work as the rebalancing requires a string of record losses following record pandemic profits. Q2 is the fourth straight quarter of significant losses, and both the time and magnitude of the losses should send a strong enough signal to tighten capacity.”


ACT says that for a while now, shippers have held the upper hand in terms of pricing power, but according to Denoyer, the trend is shifting and carriers are starting to feel the impact of lower rates on their capacity. Hiring and fleet exit trends show capacity is slowing at the margin even though new equipment production remains elevated. He noted that with marginal fleets scrambling for miles with busted budgets, spot rates have gone far below costs, but this trend can only continue for so long.

“The symbiotic relationship between TL and LTL is informative for understanding the freight cycle: in tight markets, freight flows from TL to LTL, and in loose markets from LTL to TL,” Denoyer said. “The trend change so far this year suggests the industry has passed peak looseness, and a rebalancing has begun. The bottom of the spot rate cycle can’t be far now.”

You May Also Like

Kenworth offers OOIDA members $1,000 savings on new sleeper trucks

Buyers can use the discount on new or special order Kenworth T680, T880 and W990 trucks with a 52-in. or larger factory-installed sleeper.


Kenworth and the Owner-Operator Independent Drivers Association (OOIDA) announced a $1,000 savings offer to OOIDA members on purchases of certain new Kenworth sleeper trucks for 2024. Kenworth said members can apply the discount on both new stock or special order T680, T880 and W990 trucks with a 52-in. or larger factory-installed sleeper.

NACFE: small depots are ready to scale electrification

Dipping your toes into electrification is one thing, leaping into running 15+ BEVs is another. Though NACFE says for many, the time is right.

FinditParts, Diesel Laptops partner to streamline heavy-duty truck repairs

Diesel Laptops’ Diesel Decoder plugs into a diagnostic port and sends data to an app. Customers can then order components from FinditParts.

ACT Research notes significant drop in U.S. trailer orders for May

May net trailer orders fell about 46% y/y, while ytd net order activity is down 25% from the same period in 2023.

Daimler Truck N.A., Salem, Electrada partner to electrify logistics

The companies say the partnership builds on growing zero-emission vehicle integration, and furthers commitments to sustainable trucking.

Other Posts
Beyond a one-size-fits-all trucking decarbonization strategy

Much of the responsibility now falls on the fleet, but that should be a welcome change.

Martin Brower expands Volvo EV fleet to deliver to Canadian McDonald’s

Adding 10 Volvo VNR Electric trucks supports McDonald’s goals of reaching net-zero greenhouse gas emissions by 2050.

Used Class 8 truck sales drop 1.5% amid weaker freight market

In addition to the slight drop in m/m sales, ACT noted a 15% drop in used Class 8 pricing, y/y.

PGT Trucking adds new facilities in KY, SC

The company aims to offer increased service opportunities for our customers and drivers while expanding its reach in the southeastern U.S.