COLUMBUS, Ind. —The latest release of ACT’s For-Hire Trucking Index is reporting the supply and demand balance decreased in August, as freight volumes and capacity declined.
The Volume Index
The Volume Index declined 6.0 points m/m, falling to 46.3 (SA) in August, from 52.3 in July, as the pull-forward ahead of August tariff deadlines ended. After considerable volume pull-forwards since late last year, the volume outlook is challenged, though the Supreme Court’s November decision regarding IEEPA tariffs may provide some relief.
“Consumer spending trends remain strong, but consumers have so far been insulated from price increases, as most tariff costs have yet to be passed on,” said Carter Vieth, research analyst, ACT. “Research Real income growth has slowed and could decline as inflation picks up. The freight downturn, now in its fourth year, is unlikely to pick up while the trade war worsens. However, the private fleet expansion that we see as a key reason behind the long downturn is starting to reverse.”
The Capacity Index
The Capacity Index decreased 0.6 points m/m, to 45.4 in August from 46.0 in July.
“Publicly traded TL carriers’ profit margins remain near the lowest levels since 2010,” Vieth said. “Tariffs have added cost and uncertainty, spurring demand for pre-tariff tractors in Q2, further delaying a for-hire recovery. Renewing bonus depreciation may help at the margin, but not with margins where they are, and major ongoing uncertainty about tariffs and emissions regulations seem to outweigh incentives to invest.”
The Supply-Demand Balance
The Supply-Demand Balance decreased in August to 51.0 (SA), from 56.4 in July, on weaker volumes following the July pull forward, but was supported by further capacity contractions.
“The supply-demand balance is unlikely to improve meaningfully in the short term, as we’re likely near the payback period following the demand surge ahead of tariffs,” Vieth said. “Additionally, goods inflation is expected to pick up as companies, that have largely forestalled tariff costs thus far, begin to pass costs along in earnest. Weaker goods demand will be counteracted somewhat by capacity contractions, but strong demand and tight supply is what’s needed for a new freight cycle to take hold.”
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