ACT Research released the August data from its For-Hire Trucking Index showing a pull back from July’s surprising and anomalous surge.
For-Hire Trucking Index for Volume pulled back to a reading of 48 in August, dropping off from a 56.7 in July. A reading of 50 is considered flat or neutral. ACT’s August pricing index also returned to negative territory, hitting 47.1 for the month, declining from a July reading of 50.3.
“While the strong consumer plus pre-tariff inventory building could still help volumes into the holidays, it appears inconsistent in the for-hire market, due in part to the weak manufacturing sector,” said Tom Denoyer, ACT Research’s vice president and senior analyst. “We think the addition of private fleet capacity is also partly responsible.”
Freight rates were also in decline in August with Denoyer adding that ACT expects a capacity rebalancing to unfold in 2020, which should eventually be positive for rates, but in the current environment, fleets are still adding capacity making July’s brief surge an unlikely sign of any turnaround.
“Our for-hire respondents have stopped adding capacity, yet retail tractor sales data tell us capacity is growing,” said Denoyer. “This will likely keep peak season muted in the for-hire market, with seasonal strength still likely closer to the holidays.”
Last month’s FTR Trucking Conditions Index for July, show that lower diesel prices had offset the effects of lower capacity utilization to push its reading into positive territory for the first time since January. However, FTR maintained a negative to neutral outlook for the rest of 2019.
“Although it has become common to hear dire warnings about the state of the trucking industry, the truck freight market as a whole is hardly collapsing,” said Avery Vise, vice president of trucking at FTR. “Rapid cooling from last year’s extraordinarily strong market certainly has left many weak carriers exposed, but freight volume and rates are holding up reasonably well – certainly if viewed in a longer-term context. Still, most of the near-term risks to our outlook are on the downside.”