COLUMBUS, Ind. — The latest release of ACT’s For-Hire Trucking Index indicates the supply and demand balance declined in June, as freight volumes decreased and capacity ticked up.
The Volume Index
The Volume Index was soft for a fourth straight month, at 41.5 seasonally adjusted (SA) in June, down from 42.5 in May as tariff-related effects, particularly early-April tariffs which were quickly lowered, and ongoing overcapacity prolong the downcycle in for-hire volumes.
“Volumes should improve in July and August following the tariff reprieve, but the pull-forwards in freight demand in the first half of the year will result in paybacks,” said Carter Vieth, research analyst, ACT. “Goods spending outpaced real income growth in 1H, suggesting even these soft volumes were supported by credit. And after surging 7.7% y/y in April, goods spending slowed to 3.7% in May, hinting at the beginning of the post-pull-forward decline. On the positive side, the recent slide in used tractor day cab prices suggests the private fleet insourcing phenomena may be starting to reverse.”
The Capacity Index
The Capacity Index increased 0.4 points m/m, to 46.8 in June from 46.4 in May, but capacity continued to decline overall.
“Publicly traded TL carriers’ profit margins remain near to the lowest levels since 2009, and on top of that, steel, aluminum, and parts tariffs have added thousands to the cost of a tractor,” Vieth said. “As result of challenging operating conditions, trade/economic uncertainty, and equipment cost increases, many fleets are opting to significantly reduce capital spending in 2025.
The Supply-Demand Balance
The Supply-Demand Balance decreased in June to 44.4 (SA), from 46.1 in May, on a decline in volumes and an uptick in capacity.
“The recent drop in demand, as tariffs went into effect, resulted in a looser market balance,” Vieth said. “Near-term demand will likely improve, but then the payback period after multiple pull forwards in freight is poised to begin. Even with modest pass-through, the inflationary effects of tariffs will likely lead to more goods demand softness in the months to come. The supply-demand balance is likely to remain at, or below, 50 in the near term, as lower demand related to the impact of tariffs counters the declines in capacity.”
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