Trucking capacity appears to be catching up to strong demand in ACT Research’s latest for-hire trucking index covering the month of August.
The For-Hire Trucking Index showed a supply-demand balance that fell to reading of 55.3 on a seasonally adjusted basis in August, compared to 56.9 in July. ACT also noted that a 3.9 percentage point decrease in the volume index has offset a 2.5 percentage point increase in the Capacity index, relative to July.
What this seems to indicate is that while demand has been high all year and capacity has been tight, the two metrics seem to be coming into equilibrium.
“The August result is below the 2017/2018 average of 61, and it appears that a gradual balancing is taking place as the industry responds to strong demand by adding capacity,” said Tim Denoyer, ACT Research’s vice president and senior analyst. “At the same time, a volume slowdown is increasingly evident.”
For this month’s survey, ACT asked fleets about how peak season is progressing and what their expectations were for the holidays. Most responders indicated that they were very busy and anticipated an active holiday season. One fleet commented that it was “going to be hard to keep current customers happy."
Demand for new trucks also appears to have fallen from 60% in July to about 55% in the latest report.
“While expectations seem high for another strong year of rate increases in 2019, both accelerating Class 8 tractor production and slowing freight growth are likely to loosen the supply-demand balance from here,” said Denoyer.