It’s a mixed bag of economic news this week, with reefer rates and Class 8 orders disappointing while the broader market continues its slow recovery.

Private fleets continue to aggressively add trucks, which is prolonging the pain for for-hire carriers. Shippers are happy…for now. But FTR warns their favorable conditions could soon slide toward neutral.

Class 8 orders weakened in June

Preliminary orders for Class 8 trucks in June totaled 13,100 units, according to FTR, which was on the lower end of expectations and down 33% from May numbers. It was also 6% off year over year.

However, FTR notes this follows a five-month period of sustained strength which averaged 25% higher than the prior year. Build slots continue to be filled at a “steady, albeit slowing, pace,” the industry analyst says.

“The levels seen in June are consistent with seasonal expectations, and the market is still performing at or above replacement levels for incoming orders,” said senior analyst, commercial vehicles, Dan Moyer. “Despite stagnant freight markets, fleets continue to invest in new equipment. Order levels are in line with historical averages and seasonal expectations, and market fundamentals remain little changed based on these preliminary orders.”

ACT Research reported 14,800 units, down 37% month over month and 12% from last June. ACT, too, was unfazed by the drop.

“Even in good years, Q2 typically delivers below-trend orders, while Q4 orders can trigger optimism at the bottom of the cycle,” reasoned Kenny Vieth, ACT’s president and senior analyst.

“With the long bottom in freight volumes and rates continuing in the most recent data from DAT amid lingering market overcapacity, for-hire carriers’ financial performance has been dismal. Entering the historically worst time of the year for orders at the bottom of tractor buyers’ profitability cycle is producing results in line with expectations. At the same time, the brightest spot in the economy has been consumer services spending, helping to support steady medium-duty truck demand.”

Reefer spot rates fall unexpectedly

Truckstop and FTR Transportation Intelligence were surprised to see van spot rates – especially refrigerated – drop to below expectations for the week ended June 28. The week is typically one of the strongest of the year for refrigerated rates, they say.

Between 2014 and 2023, the week saw reefer rates gain more than 12 cents/mile on average, so the drop came as a surprise. Dry van rates gained, but less than usual for the week. It was the first time reefer rates declined in that particular week since 2012.

Flatbed rates also fell slightly, but are only about 1% off the same week of last year, marking their strongest year-over-year comparison since July 2022.

The total Market Demand Index of 80.1 reflected the strongest overall spot market in three weeks, indicating a tightening market.

Shippers see improved conditions

FTR’s Shippers Condition Index continued its upward swing in April, reaching a positive reading of 3.0 thanks to improvements in all measured categories. The improvements for shippers were largely driven by favorable freight rates.

FTR says shippers may continue to enjoy improving conditions for a few more months before they begin to head toward more neutral readings.

“Freight rates in April were as favorable for shippers as they have been over the past year, but that climate likely will deteriorate modestly soon as capacity utilization has already begun to tighten a bit,” said FTR’s vice-president of trucking, Avery Vise.

“However, aside from unpredictable swings in fuel costs, we do not forecast negative SCI readings over the next couple of years that come close to matching the scope of positive readings recorded from mid-2022 through the end of 2023. Much can happen to change the situation, of course, but the freight market is shaping up to be much more balanced between shippers and carriers in 2025.”

‘Green shoots’ seen for carriers

We’ll close out this week’s wrap-up with good news from ACT Research, which says it continues to see green shoots for carriers and a slowly recovering for-hire trucking market.

In its latest For-Hire Trucking Index, ACT reported its Volume Index increased 12.7 points in May.

Carter Vieth, research analyst at ACT Research, said, “Whether May’s volume increase will hold is an open question, but this matches the best result in 28 months. Roadcheck may have contributed to more loads going to medium and large fleets, of which our respondent base is largely comprised. Positively, freight activity is also increasing at ports, border crossings, and in intermodal volumes.”

The Capacity Index increased only 1.4 points, but marked the eighth lowest reading in the survey’s 15-year history.

“The capacity reading continues to reflect challenging for-hire conditions, with low rates and higher costs driving fleet contraction,” Carter Vieth said. “For-hire capacity has contracted for the past 11 months and will likely continue as most large fleets have lowered or delayed capacity additions. As demand gradually recovers, for-hire contraction should start to moderate.”

And the best news for carriers? The Supply-Demand Balance rose 11.2 points, with volumes increasing faster than capacity.

“It is worth reiterating the question mark of whether this month’s volume gains are sticky. Private fleet expansion, which is not captured in this indicator, is resulting in a longer lead time to higher market rates than in past cycles. So, overall equipment purchasing trends will remain key to watch. Continuing freight demand growth should provide ongoing support to the market balance,” concluded Carter Vieth.