COLUMBUS, Ind. — The economic strength seen in 2023, which surprised some economists, could provide less ballast for freight in 2024.
However, supply contraction should propel the cycle forward in 2024, even if the broad economy slows, according to the latest release of ACT Research’s Freight Forecast, U.S. Rate and Volume OUTLOOK report.
“Capacity expansion continues to pressure the for-hire market, as the industry still collectively ignores the first rule of getting out of a hole: to stop digging,” shared Tim Denoyer, ACT Research’s vice president and senior analyst. “In addition to falling pent-up capital spending, low freight rates are driving net revocations of operating authorities to a record pace, so we expect this to shift next year.”
As freight volumes remain broadly soft, despite a few signs of recovery, the spot market remains loose. Even with a robust economy, spot dynamics remain soft as the owner-operators who returned to the road after Thanksgiving are likely running maximum miles and private fleets keep adding equipment, according to ACT.
As capacity rebalancing and a freight volume recovery gain momentum in 2024, spot dynamics should turn, but not before at least a few more months of rough sledding.
“Consumer purchasing power is improving with significant disinflation and solid wage growth driving improving retail sales trends, which will push the inventory cycle forward,” Denoyer said. “And as the industry right-sizes, tighter capacity should eventually start to push truckload spot rates higher. In an early sign of better cyclical demand in 2024, container imports and intermodal volumes have returned to growth, with global ocean constraints at both the Panama Canal and the Suez Canal pushing freight to west coast ports.”
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.