Trucking news and briefs for Wednesday, March 29, 2023:
As illustrated, roughly two years of growth followed by 12-18 months of retrenchment is a normal trucking freight cycle. Volumes have been soft for nearly a year now, so the industry is closer to the end than the start of this contraction stage of the cycle.ACT Research
Rate trends should begin to recover as soon as traction on freight volumes is established, ACT said, and slower capacity growth this month is a hopeful sign the bottoming process is closer, as fleets begin to respond to softer market conditions.
ACT’s Trucking Volume Index was in contraction territory for the eighth month of the past 11 in February at 41.3 (seasonally adjusted) from 51.6 in January. Volumes remained soft amidst a market of mixed economic signals, ACT noted.
“The soft freight market persists as inflation continues to impact consumers’ purchasing power, and recent bank failures and job cuts make recession more likely,” said Tim Denoyer, vice president and senior analyst at ACT Research.
Pricing Index weakness continues, decreasing 6.3 points, to 39.3 in February (SA) from 45.6 in January. This is only the fourth time in the index’s history that prices have been in the thirties.
“The cure for low prices is low prices, and we currently estimate spot rates are 16% below fleet operating costs, which should expedite this bottoming process,” Denoyer added. “Even as freight demand fundamentals will likely remain soft, seasonal increases in TL volumes as capacity slows and eventually tightens will build the bottom of the spot rate cycle in the next couple of months.”
