ACT Research reveals how fast trucking capacity is shrinking

Core Insights - The trucking market is experiencing a contraction in capacity due to stricter enforcement of English Language Proficiency (ELP) standards and a significant reduction in tractor builds [1][2][3] Capacity Trends - The ACT For-Hire Trucking Index indicates a contraction in for-hire trucking capacity, with the Capacity Index rising by 2.1 points month-over-month to 47.5 in September, signaling a decrease in available capacity [2] - A notable 32% reduction in tractor builds from the first half to the second half of the year has brought tractor builds below replacement levels, further shrinking the number of units in the US market [2] Driver Pool and Compliance - The heightened enforcement of ELP standards by the Federal Motor Carrier Safety Administration (FMCSA) may lead to a significant reshuffling in the driver labor market, as approximately 10% of truck drivers may not meet these standards, potentially creating a capacity crunch [3] Volume Dynamics - The Volume Index rose to 55.1 in September, the highest in over a year, indicating a rebound in freight volumes, although the situation remains complex with both risks and positives present [4] - Consumer spending increases have helped maintain inventory levels without leading to overstock, despite sluggish performance in sectors like manufacturing and housing [4] Risks to Volume Growth - The report indicates that risks to volume growth are skewed to the downside, with factors such as slowing real income growth and tariff-induced inflation posing threats [5] - Sustained consumer spending has prevented inventory from becoming bloated, reducing the risk of significant destocking similar to that seen in 2022-2023 [5]