This year should see a recovery in trucking, according to the Freight Forecast, U.S. Rate and Volume Outlook report from ACT Research.
Even though currently demand is soft, the group believes that rising imports and intermodal trends are key leading indicators of a recovery. Recovering goods demand, inventories, and global ocean shipping disruptions will likely add to US freight movements in 2024 as shippers seek to buffer safety stocks, the group notes.
“The January surge in rates following the extreme cold mostly reversed quickly as temperatures rose into seasonal market softness, but in late February, seasonally adjusted spot rates were still at six-month highs, excluding the cold snap,” shared Tim Denoyer, ACT Research’s vice president and senior analyst, in a statement.
“With January freight volumes slowed by weather, we see signs the next few seasonally soft months could turn above trend as shippers work to make up lost volumes. The truckload CEOs we interviewed at ACT’s seminar on February 21 are seeing volumes improve enough to get more selective on freight mix, but this demand is not finding its way into the spot market yet.”
The report says the leading indicators of a change in the cycle’s trajectory include strong intermodal and import trends, which suggest the inventory cycle is turning. They note, however, that the freight market remains loose, and while the cold was impactful, it was brief. They also said that the improvement in driver availability at the medium and large fleets in ACT’s for-hire survey was partly due to further exodus of owner-operator capacity.
“For-hire capacity continues to tighten at the margin and fleet capex budgets are sharply lower for 2024. There are certainly pockets of strength, such as in LTL, where capacity additions are likely, but the message of capital discipline from the industry suggests tighter supply this year, as demand begins to recover. The modal mix shifts in the Cass data suggest the cycle is through the worst, but not out of the woods quite yet,” Denoyer concluded.
