COLUMBUS, Ind. — Officials at ACT Research say their latest For-Hire Trucking Index reflects a “gradually-recovering freight market.”
The Supply-Demand Balance tightened by 2.2 points in December to 54.2, seasonally adjusted, from 52.0 in November, according to an ACT news release.
Tim Denoyer, vice president and senior analyst at ACT Research, said that with volumes stabilizing and capacity contracting, the for-hire supply-demand balance has been signaling an impending increase in freight rates for a few months.
“Truckload spot rates are 12% above the seasonal pattern in January following the cold snap,” he noted. “While weather effects should revert in the coming months, freight is an outdoor sport, so the cycle will likely find a higher trajectory as the reversion happens amid tightening capacity and recovering demand.”
The Capacity Index decreased by 3.3 points month-over-month to 44.2 in December, ACT’s news release notes.
For-hire capacity has contracted in seven of the past eight months and decreased further as fleet purchase intentions cratered and driver availability fell further in Janurary.
“Capacity is still being added industry wide by private fleets, but declining U.S. Class 8 tractor sales indicate this phenomenon is starting to slow,” Denoyer said. “Unlike private fleets, for-hire capacity has been contracting, so as private fleet additions decline, tighter industry capacity should press rates up.”
The Driver Availability Index dropped noticeably, down 4.1 points month-over-month to 50.9 in December.
“The quality fleets in our survey have been safe havens for owner operators for the past couple years, but market dynamics seem to have finally caught up with the driver market. While bad news for the drivers, it’s key to tightening the freight market. While weather is the larger near-term factor, driver availability is a critical longer-term factor also starting to help press spot rates up,” Denoyer concluded.
Born in Pine Bluff, Arkansas, and raised in East Texas, John Worthen returned to his home state to attend college in 1998 and decided to make his life in The Natural State. Worthen is a 20-year veteran of the journalism industry and has covered just about every topic there is. He has a passion for writing and telling stories. He has worked as a beat reporter and bureau chief for a statewide newspaper and as managing editor of a regional newspaper in Arkansas. Additionally, Worthen has been a prolific freelance journalist for two decades, and has been published in several travel magazines and on travel websites.