The latest release of ACT Research’s For-Hire Trucking Index showed the Volume Index dropping into negative territory, at 48.1, in November, for the first time in 27 months (50 is neutral). The supply-demand balance turned down even further, hitting 45.2 on a seasonally adjusted basis.

“Volume softened in November, after a strong October reading,” said Tim Denoyer, ACT Research’s Vice President and Senior Analyst. “One of our friends in the industry indicated the weaker month was partly because his higher-paid drivers can now afford to take more time off. Pre-tariff shipping also appeared to take a breather in November, but still seems likely to require some payback early next year.”

Meanwhile, capacity growth accelerated amid strong retail truck sales. Denoyer commented, “The combination of a drop in Volume and rise in the Capacity Index loosened the supply-demand balance. The November reading shows the loosest industry balance since April 2016.”

He continued, “We see this as a caution sign regarding rates in 2019. Accelerating Class 8 tractor production and slowing freight growth could continue to loosen the supply-demand balance as we head toward the 2019 contract rate season.”

The November fleet purchase intentions reading indicated another uptick in equipment demand, with 64.1 percent of respondents planning to buy trucks in the next three months, up from 57.2 percent in October.

“After record year-to-date orders, this series should remain elevated as long lead-time truck orders are built and hit the highways,” Denoyer noted.