The truckload market is fairly balanced as 2024 nears an end, but it is changing, according to the latest release of the Freight Forecast: Rate and Volume OUTLOOK report.
“Currently, with a significant capacity contraction by for-hire fleets and private fleet insourcing slowing, capacity has finally rebalanced enough for rates to start moving higher,” shared Tim Denoyer, ACT Research’s Vice President and Senior Analyst. “With DAT spot rates net fuel tracking 7% higher than a year ago in Q4, contract rates are rising modestly but consistently across DAT data, Cass data, and fleets’ financial reports for the first time in three years.”
“The market is very close to balance, and in 2025 the combination of normalizing equipment supply and a pre-tariff safety stock build are poised to drive higher for-hire freight demand and rates. The big private fleet expansion of the past two years will likely still leave anyone looking for a boom disappointed, but the for-hire rate recession is finally over,” he added.
“The trajectory is quite different than the past two cycles, but after three years in loose territory, the truckload supply-demand balance is set to turn tighter in the coming months,” Denoyer concluded.
Freight Forecast Report Overview
The monthly 58-page ACT freight forecast provides analysis and forecasts for a broad range of U.S. freight measures, including the Cass Freight Index, Cass Truckload Linehaul Index, and DAT spot and contract rates by trailer type. The service provides monthly, quarterly, and annual predictions for the TL, LTL, and intermodal markets over a two- to three-year time horizon, including capacity, volumes, and rates. The Freight Forecast provides unmatched detail on the freight rate outlook, helping companies across the supply chain plan with greater visibility and less uncertainty.
ACT Research Overview
ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.
Additional Resources
The key theme we’ve been highlighting for more than a year now is the insourcing of freight from the for-hire market to private fleets—which has perhaps been the defining feature extending the soft freight cycle in an economy that has surpassed expectations—but that is nearing an end, according to the latest release of the Freight Forecast: Rate and Volume OUTLOOK report.
“Lower equipment supply, particularly by private fleets, may play a key role in a market turn in 2025, in our view. And next month, an FMCSA regulation could potentially downgrade tens of thousands of CDL holders in states who have not heretofore been required to enforce the FMCSA’s Drug & Alcohol Clearinghouse,” shared Tim Denoyer, ACT Research’s Vice President and Senior Analyst. “While difficult to quantify, when state driver’s license authorities downgrade a large number of CDLs on November 18, it should have two positive effects on the industry: making our roads safer and leading truckload rates higher.”
The DAT load/truck ratio isn’t exactly a scale of 1 to 10. It can go way past 11. It reached the mid-teens in 2017 and early 2018 and the high teens during 2021, peaking above 20. Our aggregated seasonally adjusted DAT load/truck ratio broke above 7 in early October, suggesting spot rates will rise modestly in the near term.
“But the equipment capacity rebalancing needed to drive rates higher in 2025 is not here yet,” Denoyer concluded.
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