While the outlook is fraught with uncertainty and recession risks are rising, we highlight a silver lining for the for-hire freight market. Elevated uncertainty is starting to turn the tide of private fleet capacity additions after a long for-hire downturn, according to the latest release of the Freight Forecast: Rate and Volume OUTLOOK report.
“Even the EPA low-NOx standards initially promulgated by the first Trump administration planned to go into effect in 2027 are now under review,” shared Tim Denoyer, ACT Research’s Vice President and Senior Analyst. “The significant private fleet prebuying in preparation for these rules in recent years is set to end or even reverse as tariffs hit, which is likely to reduce equipment supply. While the freight demand outlook is lower, trade and regulatory turmoil are also supply shocks, which we expect to lead to freight rate inflation later this year.”
“Shippers added to safety stocks in anticipation of tariffs, and deteriorating consumer fundamentals due to elevated uncertainty suggest the for-hire freight recession will persist near term. Consumers made extra pre-tariff purchases as well, and are likely to pull back on spending as they anticipate higher inflation.
The long for-hire freight recession already led US Class 8 tractor sales below replacement levels in the first few months of 2025, so capacity is finally tightening after significant expansion in recent years. This isn’t helping the for-hire market yet, but freight demand should still increase seasonally in the coming months, and tighter capacity should mitigate the negative effects on freight demand from the trade war,” 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
ACT Research still thinks private fleet capacity additions are likely the main reason for-hire freight volumes continue to decline, according to the latest release of the Freight Forecast: Rate and Volume OUTLOOK report.
“As cost economics reassert their influence, the long-term trend toward outsourcing will eventually return, but the extended 2023 and 2024 downcycle was characterized by an extraordinary post-pandemic insourcing. This is now slowing, which suggests improving for-hire demand trends, but 2025 and 2026 capacity decisions will be characterized by looming industry regulations,” shared Tim Denoyer, ACT Research’s Vice President and Senior Analyst.
“In recent Q4 results, the large TL fleets reported capacity reductions of about 5% y/y, with little sequential change. New Class 8 tractor sales tell us that overall, capacity is still being added. News like the recent divestiture of Walmart’s Canada fleet to a for-hire provider suggest the insourcing trend may be running its course, but much will depend on the changing regulatory environment,” Denoyer concluded. “Perhaps the most important takeaway this month is that while volumes remain soft, capacity has adjusted enough to result in modestly higher rates. In addition to tariffs, this could be a key theme of 2025.”
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