Additional states are set to remove CDLs from drivers who’ve tested positive for drugs or alcohol under the Drug & Alcohol Clearinghouse in the U.S. this month, which could provide a meaningful reduction in capacity, ACT Research notes.

It also reports growth is slowly returning to the for-hire truck market, but spot market rates fell last week while remaining stronger year over year.

Shippers had a good month in August, thanks to lower fuel prices and freight rates.

ACT: CDL downgrades will reduce capacity

A badly needed reduction in trucking capacity may come in an unexpected form – the downgrading of U.S. CDL licence holders who’ve run afoul of U.S. drug and alcohol testing requirements.

“Lower equipment supply, particularly by private fleets, may play a key role in a market turn in 2025, in our view. And next month, an FMCSA regulation could potentially downgrade tens of thousands of CDL holders in states who have not heretofore been required to enforce the FMCSA’s Drug & Alcohol Clearinghouse,” Tim Denoyer, ACT Research’s vice-president and senior analyst wrote in the researcher’s monthly Freight Forecast.

“While difficult to quantify, when state driver’s license authorities downgrade a large number of CDLs on Nov. 18, it should have two positive effects on the industry: making our roads safer and leading truckload rates higher.”

Meanwhile, the DAT load/truck ratio isn’t exactly a scale of 1 to 10, ACT said of a key metric it monitors.

“It can go way past 11. It reached the mid-teens in 2017 and early 2018 and the high teens during 2021, peaking above 20. Our aggregated seasonally adjusted DAT load/truck ratio broke above seven in early October, suggesting spot rates will rise modestly in the near term,” ACT reported.

“But the equipment capacity rebalancing needed to drive rates higher in 2025 is not here yet,” added Denoyer.

Growth slowly coming to for-hire market

ACT’s For-Hire Trucking Index is also showing signs of growth returning to the market.

“Overall, freight demand is growing, but private fleet growth is still resulting in choppy for-hire demand conditions,” reported Carter Vieth, research associate at ACT Research. “Durable goods consumption rose 4.2% quarter over quarter [seasonally adjusted] in Q2, imports and inventories are growing, and cross-border shipments are increasing. But inconsistency may persist in the near term following two large hurricanes, a port strike, and likely another one in January. With private fleet costs well above for-hire carriers, we expect shippers to eventually shift freight back to the for-hire market, as low orders suggest is starting to take shape.”

ACT’s Capacity Index grew 3.2 points in September.

“This month’s reading marks the first time in 14 months that capacity has expanded, albeit just slightly. This month’s uptick likely reflects the more stable demand and rate environment, which no longer necessarily signal further retrenchment,” Vieth said.

The Supply-Demand Balance decreased from 56.9 in August to 48.8 in September due to rising capacity and reduced freight volumes.

“Private fleet expansion, which is not captured in this indicator, is resulting in a longer period with the market close to balance than in past cycles,” said Vieth. “Despite the past few months of elevated tractor sales due to mirror supply chain issues in April, slowing U.S. Class 8 tractor sales from here will help to further rebalance and move the cycle forward, albeit slowly. Continued strong U.S. economic growth is leading to improved goods demand and will make its way to the for-hire market as private fleet growth slows.”

Shippers enjoy easier August

FTR’s Shippers Conditions Index rose in August to 2.9, from a 0.5 reading in July. The forecaster said that was due to falling fuel costs and weaker freight rates.

Freight volumes and capacity utilization were flat on the month.

“A shipper-friendly market is hanging on, and we see few clear signs that the situation will change much soon,” explained FTR’s vice-president of trucking, Avery Vise. “Our outlook is for a more neutral environment in 2025, but we do not see much on the horizon that will make for more than just a marginally unfavorable market for shippers overall.”

Spot rates lost steam last week

Spot market rates, reported by Truckstop and FTR Transportation Intelligence, lost steam the week ended Oct. 25 but were stronger year over year.

The weekly decline could be a result of a fading bump provided by hurricanes Helene and Milton.

“Broker-posted spot rates for flatbed equipment in the Truckstop system saw a modest gain – the fourth in five weeks – but spot dry van and refrigerated rates fell,” Truckstop reported. “However, total spot rates posted their strongest year-over-year comparison since June 2022, and rates were up year over year for all equipment types.”

With the decline in load postings and the small increase in truck postings, the Market Demand Index fell to 66.1, which is the lowest level in four weeks.