The latest release of ACT’s For-Hire Trucking Index, showed volume and pricing down, with capacity still on the high side, resulting in a lower Supply-Demand Balance in June.
The ACT For-Hire Trucking Index is a monthly survey of for-hire trucking service providers. ACT Research converts responses into diffusion indexes, where the neutral or flat activity level is 50. Please contact us at trucks@actresearch.net if you are a for-hire executive interested in participating. In return, participants receive a detailed monthly analysis of the survey data, including Volumes, Freight Rates, Driver Availability, Capacity, Productivity and Purchasing Intentions, plus a complimentary copy of ACT’s Transportation Digest report.
Carter Vieth, Research Associate at ACT Research, commented, “The reading shows volumes continuing to contract, as sustained inflation and high fuel prices erode consumer confidence. Substitution effects are an important factor weighing down freight volumes, as consumers choose travel instead of goods spending. For context, hotel occupancy this summer matched its 20-year average. The shift in monetary policy toward the higher interest rates needed to combat inflation is also contributing to the slowdown.”
He noted, “Pricing strength continues to moderate from January’s peak, as volumes fall and more drivers enter the industry. The Omicron roll-off and Russia’s invasion of Ukraine helped hasten the decrease by adding significantly to freight costs via fuel, hurting spot rates, even as consumer spending began reverting to services from goods.”
Regarding driver availability, Vieth said, “This is the first reading above 50 in two years, the 8th highest reading in the index’s history and well above the 39.1 average in the 4-year history of this index.” He added, “The Supply-Demand Balance reflects loosening in the trucking market and a late stage in the freight cycle. With improving capacity and slowing freight volumes, the pendulum has finally swung from tight to loose. Recent entrants reliant on spot rates will struggle, and their exit will set up the next tight market.”
The ACT Freight Forecast provides forecasts for spot truckload rates by trailer type for four to six quarters and truck volumes and contract rates for three years for the truckload, less-than-truckload and intermodal segments of the transportation industry. In 2019, the average accuracy of the report’s truckload spot rate forecasts was 98%. The ACT Research Freight Forecast uses equipment capacity modeling and the firm’s economics expertise to provide unprecedented visibility for the future of freight rates, helping businesses in transportation and logistics management plan for the future with confidence.
ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.
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