ACT Research announced Friday it believes the freight market continues to be characterized by overcapacity, and with private fleets engaging in spot activity more than in past cycles, spot rates remain only slightly above the late-2023 lows.
“Class 8 tractor backlogs are thinning, but retail sales remain above replacement, more than two years after the spot market turned down. This fits the definition of a pre-buy to a tee,” saysTim Denoyer, ACT Research’s vice president and senior analyst.
Denoyer says through mid-July, rates have exceeded seasonal patterns by about four cents, mostly a temporary boost from Beryl, which hit during a seasonally soft period for the truckload spot market. Storms during stronger seasonality may have a larger impact on rates, he says.
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“Freight market conditions are usually soft in early July, but DAT’s load/truck ratio rose meaningfully in the days following Beryl and have remained stronger than normal seasonality since. Of course, the surge will likely be short-lived. But in our view, a seasonally adjusted DAT load/truck ratio at 7 signals a market closing in on balance, if still not quite there yet. We need to see this measure at an 8 or 9 to push rates up much,” Denoyer says.
ACT Research adds the DAT load/truck ratio isn’t exactly a scale of 1 to 10. It can go way past 11. It reached the mid-teens in 2017 and early 2018 and the high teens during 2021, peaking above 20.
