ACT Research's for-hire trucking index shows both freight volumes and capacity declined in October.
"The payback period we've oft mentioned following pull-forwards appears to be roosting in Q4," says Carter Vieth, research analyst. "While consumers have so far remained resilient, evidence from industry participants points to a muted holiday season, with many equipment suppliers seeing very soft demand ahead of the holidays. Other key freight generating industries like manufacturing and housing remain stuck in neutral, or worse."
The Volume Index dropped 8.1 points to 47, seasonally adjusted, in October. September saw a 13-month high of 55.1. The Capacity Index also dropped 0.7 points month-over-month to 46.8 in October. It was 47.5 in September.
"While data center investment growth is keeping the economy afloat, there isn't a whole lot of freight in a data center," Vieth says. "While the outlook in the near term is choppy for volumes broadly, just as pre-tariff shipping activity earlier this year was temporary, so too will be the paybacks."
The Supply-Demand Balance decreased to 50.3, seasonally adjusted, in October, down from 57.6 in September. This number is unlikely to improve, Vieth says, as the payback period will last a few months. Goods inflation may pick up again as pre-tariff inventories draw down, but cuts have already begun. ACT expects lower goods demand to be counteracted by capacity contractions, but lower tariffs and the end of the payback period may support a recovery, Vieth says.
"Capacity continues to contract as current levels of profitability remain a constraint on investment. The pullback of private fleets, as well as the necessary evil of small fleet failures, will also continue to tighten capacity," Vieth says.
"Ongoing tariff and regulatory uncertainty are also likely to slow equipment buying in the short term, though recent news from ATA suggesting modified low-NOx rules, rather than an outright delay, could spur some fleet investment."
