Freight demand is nearing an upturn as growing goods spending, a turning inventory cycle, and rising industrial production will add to freight demand this year, ACT Research states in its most recent freight forecast outlook. After a two-year downturn, the upturn is likely within a couple of months, the company says.
“We’re frequently asked who’s buying all these trucks with spot rates at sharp operating loss levels and carrier margins under severe pressure. In our view, private fleets who operate vehicles on longer trade cycles are likely planning for the 2027 emissions regulations, which may drive record demand for new commercial vehicles in the next few years,” says Tim Denoyer, ACT Research’s vice president and senior analyst.
“For the past year, cost economics have taken a back seat to supply chain resilience and planning for upcoming climate rules, as we see it, supporting new truck demand and pressuring freight rates,” Denoyer says.
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“But this is changing in 2024 as order intake has softened and private fleets join for-hire fleets in reconsidering costly capacity additions. We think a lower Class 8 tractor supply dynamic will be very helpful in bringing freight back to the for-hire market.”
Denoyer adds that with help from rising used tractor exports to Mexico, ACT estimates the Class 8 tractor fleet “is nearly finished growing for a while." Since the start of the pandemic, he says the fleet has grown 12%. “But our Freight Composite, which measures the freight economy in real GDP terms, has grown even more. Large capacity additions of the past two years were a primary factor driving rates down, and we think the slight closing of the equipment supply spigot in a growing economy will help shake the truckload market out of the doldrums.”
