Truckload capacity is tightening, especially along the West Coast and in parts of the Southeast, Longbow Research says, even as other reports indicate slower growth in demand for trucking services and an economic recovery shifting to a lower gear.
That may indicate trucking companies remain cautious about the longevity of a surge in truckload freight that began earlier this year and are keeping a tight rein on their tractor-trailer fleets. That is likely to push up truck pricing this summer.
Longbow Research's Weekly Truckload Barometer hit a new high this week, climbing 18 percent to 172.2, the investment research firm said July 7.
"We believe this was partially helped by reduced equipment availability over the past week with some truckers taking time off around the July 4 holiday," Longbow analysts Lee A. Klaskow and J. Douglas Woodrich said in a report to investors.
The barometer is a measure of available truckload freight relative to available equipment capacity. The barometer rises as capacity tightens.
In contrast, Morgan Stanley Research's Truckload Freight Index has declined in recent weeks, dropping 10.1 percent from its peak on May 14 through June 25. The TFI measures incremental truckload demand against capacity.
Even if demand moderates, there is still plenty of freight available to move. The Cass Freight Index for shipments shot up 9.1 percent in June over May, its fifth straight month-over-month improvement and its biggest sequential leap this year.
By The Numbers: Cass Freight Index.
Morgan Stanley still expects a strong peak season for truckload carriers, despite the decline in their freight index, "but nothing near the peaks of 2004 and 2005," analysts Adam Longson and William Greene said in a June 25 note to investors.