ACT Forecasting Methodology

Supply: Understanding Class 8 tractor capacity

ACT’s view of freight supply begins with the Class 8 tractor population. Tractors are the equipment base most directly tied to truckload freight capacity, which makes them a critical input in ACT’s freight forecasting methodology.

ACT evaluates Class 8 tractor demand through three connected principles:

1. Stock Replacement: How many Class 8 tractors need to be replaced each year?
2. Economic Activity: How much freight activity is being created by the economy?
3. Productivity: How are utilization, fleet efficiency, modal shifts, and tractor density changing the amount of work each tractor can support?

Together, these principles help ACT evaluate how much equipment capacity may be needed to serve future freight demand.

Stock replacement: Measuring the equipment base

ACT’s stock replacement model uses lifecycle assumptions and historical retail sales figures sourced from OEM data to estimate how the Class 8 tractor population changes over time.

The model considers three key questions:

1. First trade pressure: Are tractor values and market conditions strong enough to support trade activity, or are fleets likely to hold equipment longer?
2. Active fleet: How many tractors are available for regular freight-hauling work?
3. Total fleet: How many tractors remain in the broader market, including secondary-use applications?

From this model, ACT develops three important outputs:

• Total fleet population
• Fleet age
• Underlying replacement demand

These outputs help ACT understand how much equipment may need to be replaced and how that replacement cycle may affect future capacity.

Active fleet: Separating freight-hauling supply from total equipment population

ACT uses its used truck database, including odometer and transaction data, to understand when Class 8 tractors move from active freight-hauling use into secondary-use applications.

This helps ACT evaluate two important views of the tractor population:

• U15 population: Tractors 15 years old and younger. This is a broad view that includes truckload, private fleet, less-than-truckload, intermodal, drayage, agricultural, and other uses.
• U11 population: Tractors under 11 years old that are more likely to be active in regular freight-hauling applications.

By narrowing from total market population to the freight-hauling tractor base, ACT can better evaluate the equipment supply most relevant to truckload capacity and freight-rate forecasting.

How ACT builds the freight-hauling tractor population

ACT begins by separating Class 8 tractors from total Class 8 retail sales:

Total Class 8 retail sales – Class 8 straight truck retail sales = Class 8 tractor retail sales

From there, ACT updates the freight-hauling tractor population by evaluating new tractor additions, existing tractor population, and aging equipment moving out of the primary freight-hauling fleet.

This process helps ACT estimate the active tractor supply most relevant to freight capacity, utilization, and future rate conditions.

Demand: Measuring freight-generating economic activity

Freight demand is not created equally across the economy. Some economic activity generates significant freight movement, while other activity creates very little truckload demand.

To better measure the parts of the economy that matter most to freight, ACT uses the ACT Freight Composite Index — a freight-weighted measure of economic activity that helps connect economic output to freight movement.

The index considers the economic sectors most closely tied to freight demand, including durable goods consumption, manufacturing, residential investment, business investment, and other freight-generating activity. This approach helps ACT evaluate both for-hire and private fleet activity and better understand how economic changes may affect Class 8 tractor demand and freight-rate conditions.

Additional freight activity signals

ACT also uses the Cass Shipment Index as an important view into transactional freight activity and shipment trends. This data helps ACT evaluate freight movement at a more granular level and compare market activity against the ACT Freight Composite Index.

By combining economic indicators, freight shipment data, and analyst interpretation, ACT builds a more complete view of freight demand and market-cycle direction.

Productivity: How efficiently the market uses equipment

Freight demand and tractor supply do not operate in isolation. Productivity also changes how much work the available tractor population can support.

ACT evaluates productivity through several factors:

• Density changes: How shipper efficiency, packaging, routing, and delivery practices affect the amount of freight moved.
• Modal shifts: How freight movement between truckload, rail, intermodal, and other modes changes the work required from Class 8 tractors.
• Utilization: How effectively fleets use available tractors to meet freight demand.

Productivity helps ACT understand whether the market needs more equipment, can do more with the existing tractor base, or may experience capacity pressure as freight conditions change.

Fleet economics: Ability and willingness to buy

Equipment demand is shaped by more than freight activity. Fleets must also have the financial ability and business confidence to purchase new tractors.

ACT evaluates fleet profitability, operating conditions, and publicly traded truckload carrier financial performance to understand whether fleets are likely to replace equipment, expand capacity, or delay purchases.

This matters because profitable fleets are more likely to invest in replacement or growth. When operating conditions weaken, fleets are more likely to defer purchases, extend equipment life, and reduce capacity growth. By tracking carrier financial health over time, ACT adds an important behavioral and economic layer to its equipment and freight forecasting methodology.

Bringing supply and demand together

ACT’s freight forecasting methodology brings supply, demand, productivity, and fleet economics together into a balanced market view.

On the supply side, ACT evaluates:

• Class 8 tractor retail sales
• Class 8 tractor population
• Freight-hauling tractor population
• Truckload carrier profitability
• Replacement demand
• Equipment supply and build plans

On the demand side, ACT evaluates:

• Cass Shipments Index
• ACT Freight Composite Index
• Freight-generating economic activity
• Productivity trends
• For-hire and private fleet market activity

This balanced methodology supports ACT’s forecasts for truckload spot and contract rates across dry van, refrigerated, and flatbed markets. It also helps customers understand not only where rates may be headed, but why the market may be moving in that direction.

Why methodology matters

Forecasts are only useful when customers understand the logic behind them. ACT’s methodology is designed to connect market signals across freight demand, equipment supply, productivity, and fleet economics so customers can evaluate planning assumptions with greater confidence.

Whether your team is preparing transportation budgets, pricing freight, planning equipment purchases, evaluating residual risk, or building market models, ACT’s methodology provides a disciplined framework for understanding the cycle.