Trucking news and briefs for Friday, May 26, 2023:
ACT Research said a normal trucking freight cycle includes two-plus years of growth followed by about 18 months of retrenchment. The Volume Index has been below 50 for 11 of the past 13 months. While the near-term outlook remains cautious, imports should begin to recover soon. If this cycle is like the last two, demand growth will return in 2024, perhaps even late 2023.ACT Research
The Trucking Volume Index weakened further in April, at 37.6 compared to 44.6 in March. Destocking contributed to the softness, ACT said, although the 24% year-over-year decline in container imports in the first quarter likely represents the worst of the destocking.
“A slowing in destocking would be a positive for volumes,” said Tim Denoyer, vice president and senior analyst at ACT Research. “Inflation, while showing tentative improvement, continues to impact consumer spending power, with retail sales in real terms down 3.6% y/y in April. The slow start produce season may also be a headwind.”
The Pricing Index’s slide continued, as well, falling 2.7 points to 33.4 in April from 36.1 in March. This is the second lowest reading in the index’s history, with only April 2020 being lower.
“We believe the cure for low prices is low prices, and since October 2022 the DOT has revoked a net 11k operating authorities,” Denoyer added. “While the pricing pendulum remains with shippers for now, the next capacity rebalancing has begun. With capacity slowing and set to decline later this year, rate trends should begin to recover as soon as traction on freight volumes is established.”
The Capacity Index ticked down by 0.8 points month over month to 51.8 in April, still growing, but at a slower rate than in 2022. Improvements in equipment production and drivers, due to improvements in the supply chain and drivers seeking safe harbor in larger fleets, helped grow capacity for the past 18 months.
