The latest release of ACT Research’s For-Hire Trucking Index, June data, showed nearly across-the-board declines, with capacity again the lone exception. The Volume Index dropped further into negative territory, falling to 43.2 (SA) in June, from 46.7 in May. The June Pricing Index, at 43.8 (SA), recovered a good bit of last month’s sharp decline, up from 38.8 in May on a seasonally adjusted basis, the lowest in survey history.

“Volumes and utilization have been down seven of eight months, and the supply-demand balance has been loosening for eight straight months,” said Tim Denoyer, ACT Research’s Vice President and Senior Analyst. “In line with several Q2 earnings warnings from truckload carriers this week, this is further confirmation of a weak freight environment. May’s Pricing Index looked a little anomalously bad, so it was good to see that pick back up, though still not a great level in June.”

Regarding the Volume Index, Denoyer said, “Volumes reached a new cycle low in June, likely due in part to rapid growth of private fleets, the slowdown in the industrial sector and some inventory drawdown. This coincides with most other freight metrics.”

He added, “The supply-demand balance reading loosened to 41.4, from 42.1 in May. The past eight consecutive readings have shown a deterioration in the supply-demand balance, with June the largest yet.”

ACT Research: Industry Astride Class 8 Demand Inflection
According to ACT Research’s latest State of the Industry: Classes 5-8 Report, June’s Class 8 order broke the string of falling order volumes, with the opening of 2020 order books, garnering a 19 percent rebound. While better orders slowed the rapid backlog decline, the situation is temporary, as coming months represent the seasonally weakest order period of the year, suggesting rapid backlog declines should continue in the near-term.

“The industry is currently astride the Class 8 demand inflection,” said Kenny Vieth, ACT Research’s President and Senior Analyst. “On one side of the ledger, weak freight volumes and rates will increasingly pressure carrier profits, thereby moderating demand for new equipment. On the other, significant new capacity additions and steadily increasing inventory volumes suggest current build rates are unsustainable.”

Regarding the medium duty markets, Vieth commented, “Medium duty metrics remained in-line with expectations again in June, with most metrics close to their prevailing trends, if displaying some fraying at the edges.”