Freight market continues to slump as hot truck sales add capacity

Demand for freight capacity is continuing to drop from its precipitous heights of 2018, and a market forecast said yesterday that hot truck sales and turbulent trade tariffs are exacerbating those pressures.

The analysis was included in the May installment of the "ACT Freight Forecast" from Columbus, Ind.-based analyst and forecasting firm ACT Research. The report is a U.S. rate and volume outlook covering the truckload, intermodal, less than truckload (LTL), and last mile sectors.

Shining a spotlight on one portion of the market, the report noted that dry van truckload (TL) spot rates, net fuel, fell nearly 19 percent year-over-year in April, and more than 3 percent on a month-over-month basis from March, more than twice the historical average seasonal drop in April.

"Freight remains soft, as expected, and while we see reasons for recovery in the second half of 2019, escalating trade tensions raise the risk of freight recession," Tim Denoyer, ACT Research's vice president and senior analyst, said in a release. "Class 8 tractor retail sales are on fire, adding capacity to the market at an unfortunate time for truckers. Shippers are increasingly targeting freight cost savings, likely emboldened by attractive rates in the spot market."

The forecast comes as analysts such as load board operator DAT Solutions acknowledged that freight demand is easing as trucking capacity expands, but predicted that the market would see a soft landing, remaining in positive territory instead of sinking into recession.