The latest release of ACT Research’s For-Hire Trucking Index, with June data, showed continued improvement in the diffusion index measures tracked.
June’s Volume Index rose to 70.4 in June, from 19.3 in April and 50.2 in May, with pricing and productivity at 65.2 and 69.9, respectively. Capacity remained stuck in neutral, hovering near the 50 mark.
“The survey confirmed much of what we witnessed in rate data over the course of June, as the supply-demand balance tipped in truckers’ favor as the economy reopened,” said Kenny Vieth, ACT Research’s president and senior analyst. “While encouraging, we would note some transitory risks, one being the economic strength in May and June was heavily subsidized by Congress and the Federal Reserve. Additionally, June’s strong rates benefited from parked trucks and laid-off driver capacity.”
Regarding the uptick in freight rates, Vieth said, “The strong rebound in freight volumes from April’s trough underscores the rapid move in freight rates, as the market moved from too little to too much freight relative to available capacity. The path on rates from here will be largely determined by the economy’s ability to hold the line on freight volumes.”
When asked about the overall picture, Vieth said, “Shrinking Class 8 retail sales suggest equipment capacity will continue to tighten, but with sidelined drivers likely returning and lenders extending loans, it may be a while before the market tightens structurally. The road back might be a long one.”