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 – 2024 Year in Review
Economic Overview:
The U.S. economy ended 2024 on a strong footing, with annual GDP growth revised upward to 2.8% year-over-year. Resilient consumer spending, bolstered by record-high household net worth and robust labor market conditions, helped counterbalance the headwinds from high interest rates. Inflation eased significantly throughout the year, prompting the Federal Reserve to cut rates, which offered some relief to rate-sensitive sectors. However, rising Treasury yields introduced new pressures on borrowing costs. As the year concluded, signs of softening economic activity emerged, setting the stage for moderated growth in 2025.
Freight and Transportation:
Freight demand displayed modest resilience in 2024, with the ACT Freight Composite Index rising 3.2% for the year. Yet, the pace of growth slowed due to inventory adjustments, softened consumer spending, and persistent overcapacity. Truckload spot rates experienced incremental recovery, particularly in the latter half of the year, but remained well below pre-pandemic highs. Capacity rebalancing challenges continued to limit rate gains, delaying broader market recovery into 2025.
Key trends that defined the freight and transportation landscape in 2024 include:
- Freight Demand Moderation: While freight volumes remained steady, growth slowed, reflecting inventory normalization and cautious consumer spending patterns. Despite a stable environment, robust expansion opportunities were limited.
- Spot Rate Challenges: Incremental spot rate improvements in Q3 and Q4 were driven by one-time disruptions, including extreme weather events. However, sustained recovery was constrained by overcapacity and subdued demand.
- Capacity Adjustments: Overcapacity persisted, particularly in the for-hire segment, as private fleets absorbed freight volume. The rebalancing process is anticipated to extend into 2025 as fleets adjust to evolving demand.
Class 8 Trucks:
The Class 8 market saw notable gains in 2024, with production reaching approximately 330,168 units. Vocational truck demand was the primary driver, fueled by infrastructure investments and industrial activity. A surge in September vocational orders provided a temporary boost, but inventory overhangs remained a key constraint as the year closed.
Medium-Duty Trucks (Classes 5-7):
The medium-duty market faced challenges in 2024, with overall softness persisting. While vocational demand remained stable, production constraints due to bottlenecks in the body-building sector slowed deliveries. Economic uncertainties led fleets to adopt cautious purchasing strategies, limiting growth potential through year-end.
Trailers:
The trailer market struggled to regain momentum in 2024, with declining production trends observed throughout the year. Refrigerated trailers maintained steady demand, but overall order activity weakened as fleets deferred purchases amid caution. Persistent overcapacity and supply chain disruptions hindered broader recovery, with only marginal improvements noted in Q4.
The 2024 trucking industry underscored the ongoing challenges of capacity management, regulatory shifts, and economic uncertainty, while also highlighting opportunities for growth in vocational markets and infrastructure-driven demand. Looking ahead, 2025 promises continued evolution as the market navigates these dynamics.