As we enter the final quarter of 2024, the North American trucking industry continues to navigate economic shifts and market adjustments. While the economy has shown resilience, the effects of higher interest rates and tightening credit conditions are becoming more apparent. This update provides an outlook for the remainder of 2024, highlighting key trends shaping the industry.
How confident should your business be in ACT's forecasting for 2024?
For 2023, ACT's forecasts for the shipments component of the Cass Freight Index® were 96.9% accurate on average for the 24-month forecast period.
ACT Research’s 2023 forecasts for the Cass Truckload Linehaul Index® were 96.6% accurate on average over the past 24 months, and 98.5% accurate over the past 12 months.
Trucking Industry Trends - October 2024
Economic Overview
The U.S. economy has maintained a steady pace, with GDP growth for 2024 projected to increase by 2.6%. Consumer spending and business investment have supported growth, but the impact of higher borrowing costs is likely to slow momentum in Q4. As inflationary pressures ease, the broader economy is expected to soften slightly, with economic growth slowing as we move into 2025.
Freight and Transportation
Freight demand has remained resilient throughout the year, with the ACT Freight Composite Index on track to grow by 3.2% for 2024. However, the pace of growth has slowed, and capacity rebalancing continues to challenge the market. Truckload spot rates have improved modestly since Q3, but gains are expected to be limited in the final quarter of the year due to lingering overcapacity and seasonal fluctuations.
The freight and transportation market continues to demonstrate resilience, but several key trends are shaping the outlook for the rest of 2024:
- Moderation in Freight Demand:
While freight demand has been solid throughout the year, growth has slowed, with the ACT Freight Composite Index projected to rise by 3.2%. This moderation is largely attributed to softening consumer demand and inventory adjustments. As retailers and manufacturers normalize inventory levels, freight volumes are expected to remain stable but with less room for significant growth in the near term. - Spot Rate Recovery Lags:
Truckload spot rates have seen modest improvements since Q3, but they remain well below pre-pandemic highs. Despite this, capacity remains ample, and the rebalancing process is taking longer than expected. External factors such as weather disruptions and port delays have caused short-term spikes in rates, but a sustained recovery in spot rates is not expected before the end of the year. - Ongoing Capacity Rebalancing:
The industry is still dealing with overcapacity, especially in the for-hire segment, which has kept upward pressure on rates relatively muted. As fleets work to right-size their operations, capacity rebalancing will continue to be a major theme. Private fleets, in particular, have absorbed a larger share of freight, pulling volume away from the spot market and slowing overall rate increases.
Class 8 Trucks
Class 8 truck production has shown strong growth in 2024, with a projected increase of 8.3% year-over-year. However, production rates are expected to slow in Q4 as elevated inventory levels and cooling demand start to influence market dynamics. September saw a temporary spike in orders driven by vocational demand, but overall growth will likely remain subdued for the remainder of the year.
Medium-Duty Trucks (Classes 5-7)
The medium-duty truck market has faced softness in 2024, with production expected to decline by 3.6% compared to the previous year. While demand for vocational trucks remains steady, supply chain disruptions, particularly in body-building capacity, have constrained production. Economic uncertainty is causing fleets to adopt a cautious approach, limiting growth prospects through the end of 2024.
Trailers
Trailer production has faced persistent challenges in 2024, with a 5.4% year-over-year decline anticipated by year-end. While demand for certain trailer types, such as refrigerated trailers, has remained stable, overall order activity has slowed as fleets defer purchases amid economic uncertainty. Overcapacity and supply chain disruptions continue to impact the sector, with only a gradual recovery expected in the final months of the year.
For more details on the trucking industry forecast for 2023, see ACT's freight & transportation forecast.