Freight conditions slumped in May, burdened by plummeting prices in for-hire trucking, study shows
A monthly economic index of the trucking market found today that for-hire freight conditions in May declined across nearly every measure, ACT Research Co. said.
The sole bright spot in the report was trucking capacity, which rose slightly in May to reach an index value of 54.6, from April's 54.3 reading, according to ACT, a Columbus, Ind.-based analyst and forecasting firm.
Every other measure dropped significantly, ACT found. The Pricing Index fell to its lowest level in survey history, sinking to 38.8 on a seasonally adjusted basis from its level of 45.4 in April. The Volume Index dropped further into negative territory, hitting 46.7 from 49.5 in April. Fleet productivity/utilization slipped to 46.0 in May on a seasonally adjusted basis, down from 49.4 in April.
The report was the latest measure to show tides in the freight market receding from the historic high-water marks they hit in 2018, following similar analyses from players ranging from third party logistics provider (3PL) Coyote Logistics and consulting firm FTR to ACT itself.
"May's Pricing Index was the fourth consecutive negative, after 30 straight months of expansion," Tim Denoyer, ACT Research's vice president and senior analyst, said in a release. "This confirms our expectation that the annual bid season is not going well for truckers. We continue to believe rates are under pressure from weak freight volumes and strong capacity growth."
Regarding the Volume Index, Denoyer said, "Volume in May fell for the sixth time in the past seven months. The softness coincides with several other recent freight metrics, with the drop likely due in part to rapid growth of private fleets and the slowdown in the industrial sector of the economy."
The latest ACT For-Hire Trucking Index showed nearly across-the-board declines, with capacity the lone positive (not positive for rates). The Pricing Index fell sharply, to 38.8 in May, in the heart of TL contract season, from 45.4 in April. #Trucking https://t.co/XpdAbSmWLz pic.twitter.com/gVO9BpHPhL
— ACT Research (@actresearch) June 21, 2019