For-hire freight rates and fleet profit margins are finally improving after a tough few years—but how long will the upswing last?

This video shares expertise from Tim Denoyer, VP and senior analyst for ACT Research, at the company’s Market Vitals seminar in Columbus, Indiana.

Looking at the market, Denoyer sees fairly flat freight demand.

“Overall, it’s not wonderful on the demand side, which isn’t a shock, given where interest rates are, the job market, and those types of things,” Denoyer said. “We weren’t expecting wonderful freight volume outcomes. The housing market, for example, is one area where we’re pretty concerned at the moment.”

For truck capacity, however, Denoyer notes the well-known constraints on driver and equipment availability.

"The supply side has a number of constraints," Denoyer said. “The driver market in particular is probably the biggest deal, but equipment costs are going up [and] equipment availability is down, and ... there’s a lot of concern about the transition to the new low NOx engines coming next year.” 

Those constraints are likely to lead to a “longer rate cycle than normal,” but, weighing the different economic variables, Denoyer notes a shorter cycle is also possible.

“You can make the argument both ways right now,” he said.