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.
The report addresses the truckload, less-than-truckload and intermodal sectors of the freight market, all targeted at understanding future rates. As the report was developed, we 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, 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.
- 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.”
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.”
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”.
- 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.”
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.