The trucking sector outlook is finally nearing an upturn as freight demand is set to grow this year in reaction to the trends of growing goods spending, a turning inventory cycle, and rising industrial production, according to analysis from ACT Research.
After a two-year downturn, that upturn is likely within a couple of months, according to the latest release of the “Freight Forecast: U.S. Rate and Volume OUTLOOK report,” the Columbus, Indiana-based firm said.
“We’re frequently asked who’s buying all these trucks, with spot rates at sharp operating loss levels and carrier margins under severe pressure. In our view, private fleets who operate vehicles on longer trade cycles are likely planning for the 2027 emissions regulations, which may drive record demand for new commercial vehicles in the next few years,” Tim Denoyer, ACT Research’s Vice President and Senior Analyst, said in a release.
“For the past year, cost economics have taken a back seat to supply chain resilience and planning for upcoming climate rules, as we see it, supporting new truck demand and pressuring freight rates. But this is changing in 2024 as order intake has softened and private fleets join for-hire fleets in reconsidering costly capacity additions. We think a lower Class 8 tractor supply dynamic will be very helpful in bringing freight back to the for-hire market,” Denoyer said.
According to ACT’s forecast, the Class 8 tractor fleet is nearly finished growing for a while, after expanding by 12% since the start of the pandemic. “Large capacity additions of the past two years were a primary factor driving rates down, and we think the slight closing of the equipment supply spigot in a growing economy will help shake the truckload market out of the doldrums,” Denoyer said in the report.
