The latest trucking economic data paints a mixed picture that reflects softening freight volumes, but an improving alignment in supply and demand.
Shippers saw conditions improve but FTR warns the good times may not last.
For-hire truck tonnage retracts
For-hire truck tonnage retracted 1.6% in June, according to the latest data from the American Trucking Associations (ATA). This after a 3% jump in May.
“While giving back some of the gain from May, it appears that truck freight tonnage is slowly going in the right direction since hitting a recent low in January,” said ATA chief economist Bob Costello. “Despite June’s decline, the second quarter average was 0.2% above the first quarter and only 0.2% below the second quarter in 2023, which are good signs that truck freight might be finally turning the corner.”
Year over year, the decrease was 0.4% in June.
Supply-demand balance aligning: ACT
ACT Research reported in its latest For-Hire Trucking Index that the supply-demand balance between fleet and freight is narrowing.
“Volumes have been fairly flat this year, but they’ve improved to ‘less worse’ on a year-over-year basis, with the index averaging 48.8 through the first half of this year, versus 42.8 last year,” Carter Vieth, research analyst at ACT said of the Volume Index.
“Even with consumers under strain, real U.S. retail sales are up 1.8% year to date, and further disinflation helps support our outlook on real income growth. Additionally, intermodal and import volumes are trending positive, which minimally adds to overall surface freight volumes. Private fleet insourcing has likely taken away some for-hire demand, but the recent softening in U.S. Class 8 tractor sales indicates a slowing in private fleet growth.”
ACT’s Capacity Index, however, grew 3.6 points in June.
“Though the index increased m/m, this month’s reading marks the 12th month in a row capacity has been below 50, the longest streak of decline since the inception of the survey in late 2009,” Vieth said.
“Fleet capacity contractions occurring at a slower rate suggest the supply-demand balance between the fleet and freight is narrowing. Given the duration of this downturn and the still-weak fundamentals, it’s hard to see capacity turning positive in the coming months, especially as the US tractor sales trend continues to sag.”
Shipper conditions improve
FTR indicates shipper conditions improved in May. Falling diesel prices and a favorable rate environment for shippers were to thank. But FTR cautions the index is likely to near neutral territory and turn slightly negative later this year as volumes, utilization and rates will increasingly favor truckers.
“May was almost a repeat of April aside from fuel costs. Freight rates were the most favorable for shippers they had been in a year, but we expect them to return to the softer climate seen during the first quarter,” said Avery Vise, FTR’s vice-president of trucking.
“Our outlook for freight volume has strengthened a bit, putting at least some upward pressure on both capacity utilization and rates. However, shippers likely will see conditions that are more accurately characterized as neutral rather than negative. Ample capacity in trucking continues to discipline the freight market.”
Flatbed spot rates improve
The week ended July 19 showed improving spot market rates for flatdeck haulers, marking the first year-over-year increase for the segment in nearly two years, reported Truckstop and FTR.
And the week ended July 12 produced the first positive year-over-year comparisons for total spot market rates since June 2022. Week over week, rates were down across all equipment types in the most recent week.
Not a big surprise, as the weeks between the Fourth of July and early August tend to be soft for spot market rates, especially in the van segment.
The Market Demand Index fell to 63.3, its weakest levels since February aside from the week that included the Independence Day holiday.
Canada’s spot market heats up
Loadlink Technologies reports that Q2 showed impressive growth for spot market volumes in Canada.
“Our data continues to demonstrate the overall stability of annual volumes,” the company reported. While volumes decreased in June, that reflects normal seasonal trends, Loadlink reported. Volumes were down 3% year over year in June.
Cross-border loads accounted for 67% of total volumes while domestic freight made up 32% of postings.
The truck-to-load ratio in June jumped 11% from May but was 16% lower than last June, which Loadlink said reflected a health balance.
“Q2 2024 showcased the Canadian freight industry’s adaptability and resilience,” Loadlink concluded in a release. “While seasonal adjustments are to be expected, the underlying strength of the market remains clear. By leveraging data insights and strategic planning, businesses can navigate these shifts and capitalize on the exciting opportunities that lie ahead.”
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