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Home » Truck freight index shows demand surge in January to highest levels since early 2014
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Truck freight index shows demand surge in January to highest levels since early 2014

February 14, 2017
DC Velocity Staff
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A monthly index released today found that for-hire truckload freight demand in January outstripped available capacity by the widest levels in nearly three years. It's unclear, though, if that signals an upturn in shipping activity, or if January's results are due to pent-up demand following a slowdown in factory production during the holiday season.

According to consultancy ACT Research, the wide supply-demand gap was triggered by a surge in freight volume as measured in ACT's index, which soared in January by 23 points over December's levels to the highest point in three years. Truck capacity that was either sitting idle or being underutilized began to get absorbed near the end of 2016 and into January, the consultancy said.

Based on the January data, ACT President Kenny Vieth said he is cautiously optimistic about the demand outlook for 2017. On one hand, last month's numbers may reflect an acceleration of the trend that began late last year, Vieth said. However, because the results deviated so strongly from historical trends, Vieth surmised that a lot of freight was sidelined during lengthy plant shutdowns during December, and that demand was subsequently pushed into January.

The last couple of years have been difficult for truckload carriers, as a sluggish economy and excess truck capacity gave shippers and freight brokers strong leverage over pricing. Several forecasts have said that rates will firm as the year progresses, but mainly due to expected capacity reductions triggered by the federal government's mandate that all trucks built after the year 2000 be equipped with electronic logging devices (ELDs).

It is thought that the conversion from paper to digital logs will force many independent truckers—which account for the vast swath of the nation's truck fleet—out of business due to higher compliance costs and an unwillingness to work with computerized logbooks.

Transportation Trucking Regulation/Government Truckload
KEYWORDS ACT Research Co.
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