ACT Research will now publish a monthly report that will focus on the future of the U.S. trucking industry. The report, ACT Freight Forecast, U.S. Rate and Volume Outlook, will cover the truckload, intermodal, LTL and last mile sectors.
“Truckload spot rates are set to soften further due to tractor capacity additions, pulling the contract rate market down by mid-year. LTL rates will be most resilient and continue to rise due to the unique dynamics in that market, but TL and intermodal rates are heading lower,” said Tim Denoyer, ACT Research’s vice president and senior analyst.
With dry van rates and net fuel falling 15% y/y in the first quarter of 2019, ACT predicts they are likely to continue to drop in the coming months by 20% y/y. Freight growth has slowed significantly from not only the timing effects from shippers positioning around tariff threats, but also tariffs, tighter financial conditions, the industrial slowdown, housing and auto softness, and increased growth of private fleets.
“While this presents risk of a freight recession in 2019, we do expect the U.S. consumer to keep volumes growing, just very slowly,” added Denoyer. “Critically, this slowdown in freight is happening just as truckload capacity is accelerating. After growing less than freight for most of last year, truckload capacity has accelerated to 7% y/y growth in early 2019. We think this is the key story behind lower spot rates and why the pricing pendulum is starting to swing to the shipper.”
ACT’s Freight Forecast also includes a section on last mile delivery, which debates that changing supply chains are starting to affect equipment purchasing, though the Class 8 tractor sleeper is having a strong cycle.
For more information about ACT’s Freight Forecast, U.S. Rate and Volume Outlook, click here.