Frustrated by the length of the current for-hire freight market downturn? Blame private fleets! They continue add capacity and pull more freight within their own networks, according to ACT Research.

The good news is a “decent peak season” is shaping up, with near-record imports seen at U.S. ports. Spot market rates plunged to 2020 levels in the week ended Aug. 23.

But shippers are losing their edge over carriers, with FTR’s Shipper Conditions Index falling to near-neutral levels.

Private fleets in part to blame for extended downturn

In its latest Freight Forecast: U.S. Rate and Volume Outlook report, ACT Research said aggressive insourcing by private fleets is partially to blame for the extended downturn in the for-hire freight sector.

“While the truckload spot market continues to make gradual progress, seismic shifts in private fleet capacity are forestalling strong for-hire conditions,” reported Tim Denoyer, ACT Research’s vice-president and senior analyst. “We’ve been surprised at the magnitude of equipment overbuying over the past year, but Class 8 tractor sales are normalizing from a medium-term perspective.”

He indicated the private fleet sector continues to add capacity, which will weigh on for-hire freight growth in the short-term. This despite near-record imports in July, which is emblematic of growing consumer demand and the start of a broad restock, which should result in a “decent peak season ahead.”

Spot rates fall further

An anticipated spot market bump ahead of the Labor Day holiday didn’t materialize during the week ended Aug. 23, in which spot rates actually sank to their lowest level since July 2020.

They were dragged down by falling flatbed rates, which now sit just a penny higher than they were in July 2020, according to Truckstop and FTR Transportation Intelligence. Dry van rates are only slightly stronger (about 5 cents/mile) relative to mid-2020 levels.

Reefer rates ticked up by “a miniscule amount” in the latest week, but recorded their largest year-over-year deficit since early March. Truckstop continues to watch rates this week as the lead-up to the Labor Day Holiday generally sees a healthy gain for the van segment.

Total load volume reached its lowest level of the year the week ended Aug. 23, while truck postings rose, dragging the Market Demand Index to 48.9, its lowest level since the end of December.

Shippers struggling, too

Meanwhile, FTR reports its Shippers Conditions Index (SCI) fell in June to a barely positive reading of 0.3, down from 4.5 in June.

Blame freight-related factors, with balance returning to the market, FTR says.

“The days of consistently favorable freight market conditions for shippers are over, but the market does not really look tough for them, either,” explained Avery Vise, FTR’s vice-president of trucking.

“Over the forecast horizon, we do not expect the market to be even remotely as challenging as the one that shippers endured from late 2020 through mid-2022, and shippers might even fare better than they anticipate. The biggest wild card in the near term probably is the cost of fuel.”