Recent data show declining equipment and load posts, in a sign of ongoing private fleet insourcing, according to the latest release of the Freight Forecast: Rate and Volume OUTLOOK report.
“Even with more private fleet capacity in the spot market than ever before, overall spot capacity continues to be slowly whittled away by low rates,” shared Tim Denoyer, ACT Research’s Vice President and Senior Analyst. “Freight demand continues to grow broadly, through private fleets are handling the growth and insourcing. While general merchandise retail trends are positive enough to suggest a decent peak season for freight volumes overall, some sectors are struggling, so spot conditions are unlikely to improve much.”
Denoyer added, “For freight markets, a key near-term implication of elevated election uncertainty is likely to be lower equipment demand. Regardless of the outcome, the next few months are set to be contentious, and decision-makers planning next year’s fleets face immense uncertainty.”
Our DAT aggregate spot rate, net fuel, is at $1.74 in September (seasonally adjusted), unchanged from August and up marginally from $1.68 in Q4’23, and the seasonally adjusted load/truck ratio is currently 5.2:1.
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. The current 5.2 SA level suggests near-term spot rates will remain in neutral, even amid the likely brief port disruptions in early October.
Denoyer concluded, “Freight markets face more of the same in the near term, but the setup is changing into 2025.”
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.
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The freight market continues to be characterized by overcapacity, and with private fleets engaging in spot activity more than in past cycles, spot rates remain only slightly above the late-2023 lows, according to the latest release of the freight & transportation forecast.
“Class 8 tractor backlogs are thinning, but retail sales remain above replacement, more than two years after the spot market turned down. This fits the definition of a prebuy to a tee,” shared Tim Denoyer, ACT Research’s Vice President and Senior Analyst.
He added, “Through mid-July, rates have exceeded seasonal patterns by about four cents, mostly a temporary boost from Beryl, which hit during a seasonally soft period for the truckload spot market. Storms during stronger seasonality may have a larger impact on rates.”
Denoyer concluded, “Freight market conditions are usually soft in early July, but DAT’s load/truck ratio rose meaningfully in the days following Beryl and have remained stronger than normal seasonality since. Of course, the surge will likely be short-lived. But in our view, a seasonally adjusted DAT load/truck ratio at 7 signals a market closing in on balance, if still not quite there yet. We need to see this measure at an 8 or 9 to push rates up much.”
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.
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