ACT Research reported Monday in its most recent Freight Forecast outlook report that truckload spot rates are on track to rise more than 40% year over year this month.
In issuing its assessment, ACT reports the U.S. freight cycle has so far been supply-driven, but the freight demand outlook is supported by tight inventories, improving industrial activity, declining capacity and falling tariffs.
“Tighter supply remains the main reason for accelerating rates. As equipment investment declined and regulations fueled a driver shortage, the dislocation to an acutely tight [truckload] market occurred fairly quickly this year,” says Tim Denoyer, ACT Research’s vice president and senior analyst. “Most of this occurred before the May 14 Montgomery SCOTUS ruling, raising broker liability and further tightening capacity.”
Denoyer states the ACT Driver Availability Index remained in shortage territory in May at 32.6. While up from 31.5 in April, he states the survey-based diffusion index is neutral around 50 and acutely tight below 40. As seasonality softens after the Fourth of July, Denoyer says some cooling off is likely and load/truck trends have fallen from May to June, so the near-vertical trend is unlikely to persist.
“Net DOT operating authorities have improved a little in recent months in response to higher rates, and new Class 8 tractor sales are set to rise in [second half]. But we think new regulations, including the MOTUS system requiring new USDOT numbers for all fleets from May onward, will continue to tighten capacity,” he says.
