This week we have encouraging news regarding the Canadian spot market, with more loads available and fewer truck postings competing for those loads.

But in the U.S. spot market rates continue to fall, weighed down by the flatbed segment. ACT Research, meanwhile, is lowering expectations for the truck and trailer market as we head into 2024.

Canada’s spot market volumes improve

Canada’s spot market load volumes increased for the second straight month in September, while equipment postings declined.

It’s the first time Loadlink Technologies reported two consecutive months of rising load volumes since December 2022 and January 2023. Cross-border loads into Canada decline, while intra-Canada and cross-border loads to the U.S. rose.

“Year-over-year comparisons continue to temper as inflated volumes from the first half of 2022 will begin to meet with more normalized volumes in the upcoming quarter,” Loadlink said in a release.

The biggest gains were seen in loads to the U.S., up 26% compared to August but still off 9% from the same month last year. There were 4.34 trucks posted per load, down from 5.05 last month, marking a 14% decrease in the truck-to-load ratio.

U.S. spot market rates lowest since July 2020

The news is less encouraging for the spot market in the U.S., where rates in the week ended Oct. 6 were the lowest seen since July 2020, according to Truckstop and FTR Transportation Intelligence. They were weighed down by the flatbed segment, which continues to sink.

Van rates are likely to remain above levels seen in the spring, Truckstop predicts. The Market Demand Index – reflecting the number of trucks posted per load – weakened to 58 from 60.3 the previous week, which was its best reading since early June.

The total broker-posted rate decreased about 3.5 cents after increasing about 2.5 cents during the previous week. Rates were about 11% below the same 2022 week and nearly 5% below the five-year average.

Weaker outlook for truck and trailer demand

ACT Research is lowering its expectations for Class 8 and trailer markets, as a recovery in freight markets remains elusive.

“Within the broader Class 8 and trailer markets, U.S. Class 8 tractors and van trailers bore the brunt of the markdowns as freight metrics have failed to gain traction,” said Kenny Vieth, ACT’s president and senior analyst. “Less money in carriers’ pockets and lower industry build rates in 2024 also push down on 2025 and, to a lesser extent, 2026.”

ACT notes manufacturers continue to struggle to attract labor. If they curtail production because of lower demand, supply chain integrity could be compromised.

Vieth added, “If layoffs do come to pass, it will be difficult for the industry to scale rapidly in 2025 and 2026 when U.S. and Canadian truckers and dealers will want all the equipment the industry can build. ACT’s research suggests that between prices, taxes, and other affiliated costs, medium-duty and heavy-duty vehicle costs will rise by between 12% and 14% as the EPA’s Clean Trucks regulation goes live in 2027. As such, we believe the OEMs will be at least partially successful in convincing customers to begin EPA27 pre-buying in 2024. Starting pre-buying earlier should help moderate runaway demand into 2026, but risks prolonging the freight cycle downturn.”

ACT Research believes that “it’s different this time” factors are at work in 2024, and those factors will help support a fundamentally weak US tractor market. Those factors include ongoing pent-up vocational truck demand, strong tractor demand in Mexico, and labor hoarding.