ACT Research: Sharp Slowdown in For-Hire Trucking Capacity Growth

ACT Research Co.
4 min readMar 27, 2023

Freight volumes and rates declined in February, but we’re closer to the end than the start of this freight downcycle. Rate trends should begin to recover as soon as traction on freight volumes is established, and slower capacity growth this month is a hopeful sign the bottoming process is closer, as fleets begin to respond to softer market conditions, according to the latest release of ACT’s For-Hire Trucking Index.

ACT For-Hire Trucking Index: Volumes

The Trucking Volume Index was in contraction territory for the 8th month of the past eleven in February at 41.3 (SA) from 51.6 in January. Volumes remained soft amidst a market of mixed economic signals.

Tim Denoyer, Vice President & Senior Analyst at ACT Research, commented, “The soft freight market persists as inflation continues to impact consumers’ purchasing power, and recent bank failures and job cuts make recession more likely.”

ACT For-Hire Trucking Index: Freight Rates

Pricing Index weakness continues, decreasing 6.3 points, to 39.3 in February (SA) from 45.6 in January. This is only the fourth time in the index’s history that prices have been in the thirties.

He added, “The cure for low prices is low prices, and we currently estimate spot rates are 16% below fleet operating costs, which should expedite this bottoming process. Even as freight demand fundamentals will likely remain soft, seasonal increases in TL volumes as capacity slows and eventually tightens will build the bottom of the spot rate cycle in the next couple of months.”

ACT For-Hire Trucking Index: Fleet Capacity

The Capacity Index declined by 3.7 points m/m to 51.0 in February, indicating slower growth. Capacity has improved in terms of both equipment and drivers the past year, with improvements in the supply chain and as drivers have shifted to larger, well-capitalized fleets after the sharp fall in spot rates. While one month does not make a trend, slower capacity growth this month is a key sign the bottoming process is happening, as fleets begin to respond to softer market conditions.

ACT For-Hire Trucking Survey: Supply-Demand Balance

After rallying in January, the Supply-Demand Balance reverted looser, falling to 40.1 (SA) in February from 47.0 in January, with the m/m declines in both volumes and capacity.

Denoyer concluded, “The trucking market has been loose for a full year based on this series. Though the loose environment is expected to persist in the near term, we expect less loosening from here.”

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.

ACT Research: Freight Forecast

ACT Research Freight Forecast provides analysis and forecasts for a broad range of U.S. freight measures, including the Cass Freight Index®, Cass Truckload Linehaul Index®, and DAT spot and contract rates by trailer type. The service provides monthly, quarterly, and annual predictions for the truckload, less-than-truckload, and intermodal markets over a two- to three-year time horizon, including capacity, volumes, and rates. The ACT Research Freight Forecast uses equipment capacity modeling and the firm’s industry 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.

Click below to access:

More information about ACT’s Freight Forecast, U.S. Rate and Volume OUTLOOK.

More about other freight-related publications offered by ACT Research.

January’s For-Hire Trucking Index press release.

ACT’s In the News page.

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ACT Research Co.

ACT Research is the leader in commercial vehicle industry data, market analysis, and forecasting services for North America.