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In this Monthly Market Update, we will (a) provide a brief update/analysis of the full truckload market and (b) present a compelling economic analysis to provide a macroeconomic view of the state of the freight market.
As usual, in this Monthly Market Update, we will (a) provide a brief update/analysis of the truckload market and (b) present a compelling economic analysis to provide a macroeconomic view on the state of the freight market.
Full Truckload Market Overview
Loadsmart’s top 30 spot rate forecast
Our model predicts that spot rates will decrease from $2.74 in September to $2.68 in October.
- Rates are expected to remain between $2.65 and $2.70 throughout October and November, with a projected increase of about 10 cents in December due to a demand surge in the week following Black Friday and during Christmas week
- From a macroeconomic perspective, there are no significant catalysts for a sustained long-term uptrend in prices. Manufacturing activity continues to contract, and slower labor income growth will likely weigh on consumer spending in Q4
- The steady increase in the volume of consumer goods shipped during the Q3, supports the theory that we experienced a peak season pull-ahead, similar to last year. Hence, we should have a quieter Q4.
Macroeconomic indicators we are monitoring
Consumer Expenditures
Personal consumption expenditures (PCE) data from August pointed to stagnation in the consumption of goods across both durable and non-durable categories. While overall personal consumption rose modestly by 0.15% MoM, the growth was primarily driven by the services sector. Durable goods saw a marginal increase of just 0.01% MoM, while non-durables edged up by 0.03% MoM.
Retail freight activity remained solid in the Q3, Loadsmart Retail shipment volumes increased 7% QoQ in the period. However, we attribute this growth to restocking activity rather than a pick-up in consumer demand. With restocking largely complete, we expect freight volumes in the Q4 to more closely reflect underlying consumer demand patterns.
Truck Orders
FTR reported a 107% MoM increase in Class 8 truck orders. The September spike was primarily attributed to the usual opening of next year's order books. Year-to-date net orders for 2024 are up 11% compared to last year.
This increase might appear to signal optimism in the trucking industry, but it is more likely driven by the expansion plans of private fleets. The growth of the former is currently outpacing the latter, with private fleet registrations rising by 2%—a total of 16,412 units—from December 2023 to September 2024, while for-hire fleet registrations have remained relatively stable.
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Please reach out to Stella Carneiro (stella.carneiro@loadsmart.com) with any questions, suggestions, thoughts, etc.