ACT: Private fleet productivity weights on for-hire recovery

ACT's for-hire trucking index

ACT's latest For-Hire Trucking Index reflects a recovering for-hire trucking market slowed by private fleet productivity. 

The volume index decreased 4.1 points to 41.7, seasonally adjusted from 45.8 in March. 

[RELATED: ACT releases final April numbers for Class 8 orders]

"Evidence an anecdotes suggest private fleets have taken some volume from the for-hire market," says Carter Vieth, research analyst at ACT Research. "Given private fleets' cost disadvantage, and lack of incentive for backhauls, we don't expect this to last long, and recent Class 8 data suggests private fleet capacity additions are slowing, a welcome sign after an extended downturn." 

The capacity index decreased by 3 points month-over-month in April. The decrease continues to reflect challenging for-hire conditions, ACT Research says, with low rates and higher costs driving fleet contraction, as evidenced by the worst quarter for profitability amongst the publicly traded TL carriers in 14 years. 

"Class 8 sales trends suggest the ongoing capacity additions at private fleets, a key reason the downcycle has drawn out so long, are slowing too, reducing overall capacity additions and downward rate pressure," Vieth says. 

In April, the supply-demand balance fell in April to 47.5 from 48.5 in March and volumes decreased more than capacity. 

"While private fleet competition has weighed on volumes the past few months, it's not likely to last long," Vieth adds. "Solid performance of rates and the load/truck ratio in the spot market through Roadcheck suggest the gradually improving volume trends will support the market balance in 2024. Overall, the supply-demand balance suggests a market close to the elusive and impermanent equilibrium." 

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