“The past three months’ less-than-expected declines present mounting evidence of pricing stability,” said Steve Tam, Vice President at ACT Research. “We expect lower prices through the end of 2023, with a return to month-over-month growth toward the end of 2024.”
It’s unclear when used-truck prices will stabilize, however. As recently reported, used truck prices across all channels averaged $39,200 in September, which is near the bottom of the pre-COVID sales cycle.
“There are still too many trucks chasing too little freight,” Tam said. “Until the economy can strike a balance between those two factors, downward pressure on pricing will continue to exist. Once the excess capacity is absorbed, the freight rate environment and trucker profits will correct, restarting the cycle that is the commercial vehicle industry.” The amount of freight hauled by trucks ticked up in October, erasing a decline from September, according to the American Trucking Associations.
ATA’s advanced seasonally adjusted For-Hire Truck Tonnage Index increased 1.1% in October after falling 1.1% in September. In October, the index equaled 115.2 (2015=100) compared with 113.9 in September.
“After hitting a floor in April, tonnage has slowly and inconsistently improved, but remains 3% below its recent peak in September 2022,” said ATA Chief Economist Bob Costello. “Despite the monthly gain, truck freight remains soft as it continues to contract on a year-over-year basis. It is important to remember that our for-hire truck freight index, which includes both truckload and LTL freight, is dominated by contract freight with minimal amounts of spot market loads. The traditional spot market remains much weaker than contract tonnage.”
Compared with October 2022, the SA index fell 2.1%, which was the eighth straight year-over-year decrease. In September, the index was down 4.1% from a year earlier.
The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 119.7 in October, 6.3% above the September level (112.5). In calculating the index, 100 represents 2015.
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Posted Date : November 27 2023
