Freight Rates Slip Further, Volumes Lowest in Survey’s 10-Year History

ACT Research For-Hire Trucking Index shows further contraction for both volumes and freight rates

The latest release of ACT’s For-Hire Trucking Index, with March data, showed further contraction for both volumes and freight rates, now at 42.4 and 43.2 respective diffusion index readings. Productivity, while neutral at 50.0, likely was supported by the temporary pantry-stocking phenomenon.

Tim Denoyer, ACT Research’s Vice President and Senior Analyst commented, “Because of the talk surrounding a surge in freight driven by pantry stocking, the Volume Index decline was somewhat surprising, but likely reflects the start of shutdowns late in March.”

Regarding the drop in freight rates, he said, “COVID-19 is adding a new level of pricing pressure due to the sharp decline in load volumes into an already overcapacitized market. Our for-hire carriers continue to show better capacity discipline than the industry at large, which we see as a good leading indicator of tighter capacity down the road.”

When asked about the overall picture, Denoyer explained, “The supply-demand balance reading accelerated to the downside in March at 44.9, after a modestly negative reading in February, at 48.8 seasonally adjusted. The cyclical bottom that was being built prior to COVID-19 has been laid low by the health crisis. Fleets are taking aggressive actions to protect their people, including: following CDC guidelines, implementing virtual meetings and orientations, limiting use of cash, and finding creative ways to procure sanitizer.”

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