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Freight Forecast - The Rollover

Posted by ACT Research LLC. on May 3, 2019 10:05:01 AM

ACT has been involved in the freight sector for decades, but for the past year we have been investing time and energy in developing the ACT's Freight Forecast report. The report analyzes data from around the freight sector, focusing on the links between the equipment manufacturing side of the equation and freight rates. The report is for any transportation stakeholder who needs to understand where rates are heading, when and why. With help from all members of the ACT team, we have built a model that forecasts the future of freight rates using ACT's historical data on truck production, our TL and LTL Carrier databases, as well as key leading indicators developed for this report. 

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The report addresses the truckload, less-than-truckload and intermodal sectors of the freight market, all targeted at understanding of future rates. As the report has been developed, we've tested and refined the outputs to provide the best possible information to help businesses make informed decisions. Over the past year we’ve built a freight model using several regression and population models all working together, which drives our contract rate and volume forecasts. For our spot rate forecasts though, we use a separate model based on our Spot Leading Indicator, which was developed over a year ago.

1. February 2018 Outlook Report: “Did the spot market just peak? Spot Leading Indicator predicts 25%-30% y/y increases through March/April, down from 31% in February and 32% in January.”
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2. April 2018 Outlook Report: “Perhaps the largest warning sign we see in this month’s data is the sharp drop in our Spot Leading Indicator, which dropped to +5% in March and +24% on a 3mma basis, predicting further deceleration in TL spot rates.”

 

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3. September 2018 Outlook report: “The ACT Spot Leading Indicator turned negative in August to -11% y/y from +12% y/y in July, from +13% in June and +26% in May, and could fall further… the SLI predicts further deceleration in TL spot rates in the next two to three months, with a downward inflection now likely”

 

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4. December 2018 Outlook report: “Our Spot Leading Indicator signals the decline in TL spot rates will extend to the -10% to -15% range in the near-term.”

 

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DAT Dry Van Spot rates, net fuel, fell 14.6% y/y in Q1’19.

Our confidence in being able to produce a quality freight report is mainly based on ACT’s strong transportation experience. But being able to accurately predict the Dry Van TL spot market  2-3 months in advance over the past year is pretty sweet too. This validation helped us to launch the Freight Forecast at ACT's Seminar 60 this past March.

What does this mean for your business? Greater transparency into the freight markets and the opportunity to "look around the corner" will give businesses insights into the next 12 to 18 months that have yet to be available before. 

Looking to better understand the Freight Forecast? Book a call today with Tim Denoyer to understand the implications this report may have for your business.

 

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Topics: freight, freight forecast, freight rate, transportation, logistics, shipping

About ACT Research

We're the leading publisher of industry data, market analysis, and economic forecasting services for the commercial vehicle and transportation industries.

2019 Lawrence R. Klein Award Winner: Most Accurate Economic Forecast 2015-2019

  Partner to LMC Automotive and the Chinese State Information Center

  Contributor to the Blue Chip Financial and Wall Street Journal Consensus Economic Forecast


 

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