As freight demand gears up for growth this year, spurred by increasing goods spending and a shifting inventory cycle. The trucking sector appears poised for a much-awaited upturn. According to analysis from ACT Research, the long-awaited shift in fortunes could materialize within the next couple of months, marking a potential turning point after a prolonged two-year downturn.
Tim Denoyer, Vice President and Senior Analyst at ACT Research, shed light on the evolving landscape, noting the underlying factors driving this anticipated change. "With spot rates at sharp operating loss levels and carrier margins under severe pressure, questions arise about the sustainability of truck purchases," Denoyer remarked. He pointed to private fleets, operating on extended trade cycles, preparing for forthcoming emissions regulations as a significant driver of potential record demand for new commercial vehicles in the near future.
Amid cost economics taking a back seat to supply chain resilience and anticipation of upcoming climate regulations, Denoyer highlighted a shift in dynamics. "Order intake softening and private fleets reevaluating costly capacity additions suggest a changing landscape," he explained. Denoyer emphasized the potential impact of a lower Class 8 tractor supply, anticipating it to play a pivotal role in revitalizing the for-hire market.
ACT's forecast signals a plateau in the growth of the Class 8 tractor fleet, following a substantial 12% expansion since the onset of the pandemic. Denoyer underlined the significance of this trend, attributing large capacity additions in recent years to being a key driver behind rate declines. "The gradual closure of the equipment supply spigot amid a growing economy is expected to inject momentum into the truckload market," he added, offering a glimmer of hope amidst prevailing challenges.
As the industry braces for impending changes, the prospect of a revitalized trucking sector presents opportunities for stakeholders to adapt and thrive in a shifting landscape.
