According to the latest release of the Freight Forecast, U.S. Rate and Volume OUTLOOK report, ACT Research says though April will likely mark the bottom of the spot rate downcycle, elevated Class 8 build rates will limit the near-term upside.
“Spot rates rose in May, but strong new equipment production will slow the ascent initially. Class 8 backlogs are sufficient for a while but are starting to dwindle as order activity has declined with industry profitability,” shared Tim Denoyer, ACT Research’s Vice President and Senior Analyst. “That spot rates have largely held onto the gains from Roadcheck suggests the freight market is close to the elusive balance, but the rebalancing so far has been mainly on the labor side.”
Regarding fleet capacity, Denoyer added, “Though equipment capacity is still growing, labor capacity is tightening as some fleets shrink and others exit. Aside from the pandemic capacity shock in April 2020, we are on track for a record contraction in labor capacity this year, which is key to the bottoming process.”
Denoyer concluded, “Though the near-term freight volume outlook remains muted, seasonal increases in freight later this year will meet tighter capacity, pushing the cycle forward.”
The monthly 58-page ACT Freight Forecast report 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 TL, LTL, and intermodal markets over a two- to three-year time horizon, including capacity, volumes, and rates. The Freight Forecast provides unmatched detail on the freight rate outlook, helping companies across the supply chain plan with greater visibility and less uncertainty.
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.