With freight volumes, rates and tonnage all running below last year's peaks, many in the industry have begun questioning if, or when, the cycle will hit bottom.
In its most recent forecast report, released Monday, ACT Research states its expectations are freight markets will continue bouncing along the bottom in the near term, with some holiday volatility and a change in trajectory on the way next year,
"We see retail sales turning back to real growth this holiday season, after over a year of declines," says Tim Denoyer, vice president and senior analyst at ACT Research. "The acceleration in real disposable income growth as inflation slowed sharply this year, and the ongoing strong labor market, support a recovery in goods demand. The end of destocking, rise in imports, and recent easing in oil prices improve our confidence that peak season will end on a higher note for freight demand"
Denoyer also notes that although private fleet capacity expansion continues to pull freight from the for-hire market, "we think equipment purchasing patterns are changing, which should propel the freight cycle forward in 2024."
Additionally, ACT notes spot load posting remain low and spot equipment posts have declined. The company states the rebalancing of capacity is making little net progress with the industry still adding capacity. Slowing Class 8 tractor sales — recent selling rates are already down 20% from the record first half of 2023 level — means fewer new additions, and the pace of fleet exits remains historically elevated, so the removal of overcapacity is gaining momentum under the surface, the company adds.
"With freight volumes broadly starting to pick up, the spot market is still loose heading into winter, but we expect the trajectory of rates to shift in 2024," Denoyer says.