COLUMBUS, Ind. — The latest release of ACT’s For-Hire Trucking Index sees a supply and demand balance increase in July, as freight volumes ticked up and capacity declined.
“Consumer spending continues to outpace inflation, but consumers have so far been insulated from price increases, as tariff costs have yet to be fully passed on to the consumer,” said Carter Vieth, research analyst, ACT. “This won’t last much longer, as retailers have been raising prices in recent weeks, and with producer prices rising, passthroughs seem set to rise soon. On the positive side, several recent signals suggest the private fleet insourcing phenomena may be starting to reverse.”
The Volume Index
The Volume Index turned positive for the first time in six months, rising to 52.3 (SA) in July, from 41.2 in June, as the April tariff delays spurred another round of pull forwards ahead of August deadlines. This lines up with near-record loaded imports in July, similar to 1H’22 levels.
The Capacity Index
The Capacity Index decreased 0.8 points m/m, to 46.0 in July from 46.8 in June.
“Publicly traded TL carriers’ profit margins remain near to the lowest levels since 2010, and on top of that, steel, aluminum, and parts tariffs have added thousands to the cost of a tractor,” Vieth said. “As a result of challenging operating conditions, trade/economic uncertainty, and equipment cost increases, many fleets are opting to significantly reduce capital spending in 2025.”
The Pricing Index
The Pricing Index increased 6.5 points m/m in July, to 50.7 (SA) from 44.2 in June. After US tractor sales rose in Q2 as tariff-free inventory sold well, declines have resumed, necessary to help tighten capacity. In addition to lower tractor sales in July, the pre-tariff freight demand pull forward, likely contributed to the rate stabilization. US tractor sales are slowing as tariff-free inventory is depleted, but two factors remain impediments to improved pricing:
- Overcapacity remains, demonstrated by soft spot trends in the typically seasonally strong months of May and June
- Tariffs. While more capacity exits are still required to turn the freight cycle, demand is needed as well. Goods inflation from tariffs will likely weigh on volumes later this year, making a strong recovery unlikely in 2025.
The Supply-Demand Balance
The Supply-Demand Balance increased in July to 56.4 (SA), from 44.4 in June, on an increase in volumes and a downtick in capacity.
“The recent increase is likely temporary as demand surged ahead of August tariff announcements, but the payback period following multiple freight pull forwards is poised to begin,” Vieth said. “Even with modest pass through, the inflationary effects of tariffs will likely lead to more goods demand softness in the months to come.”
Dana Guthrie is an award-winning journalist who has been featured in multiple newspapers, books and magazines across the globe. She is currently based in the Atlanta, Georgia, area.
