In the release of its Commercial Vehicle Dealer Digest, ACT Research reported that in early April, following the publication of a “the sky is falling” op-ed in a transportation industry trade publication, ACT’s staff received any number of questions relating to cycle length.
The report, which combines ACT’s proprietary data analysis from a wide variety of industry sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets. This monthly report includes a relevant but high-level forecast summary, complete with transportation insights for use by commercial vehicle dealer executives, reviewing top-level considerations such as for-hire indices, freight, heavy and medium duty segments, the total US trailer market, used truck sales information, and a review of the US macro economy.
Asked about ACT’s response to the cycle-length questions, Kenny Vieth, ACT’s President and Senior Analyst, commented, “To be fair, for the first time since Q2’20 transportation metrics stopped moving ‘up and to the right’ in Q1.” He elaborated, “While a mid-2022 deceleration in freight activity and rates has long been anticipated in ACT’s freight market research and the timing of the turn was as anticipated, the magnitude of the correction was considerably larger than expected.”
About why he doesn’t think the sky is falling, Vieth explained, “Recognizing the uptick in caution flags, there is still much to like about the current situation. As a result, our forecasts for 2022 and 2023 are virtually unchanged: Carrier profitability, pent-up demand, and prebuying remain large forces that should propel the industry into the end of 2023. And, while the risk of stagflation has grown, part of the ‘-flation’ are hot US and Canadian job markets. As well, consumer debt service as a percentage of disposable income is near trough levels and corporate profits are at all-time highs, so there is greater capacity economy-wide to absorb shocks.” He concluded, “On the freight front, there are two points to make: First, carrier profits were at all-time record levels in 2021, and TL fleet contract rates are still expected to rise double digits this year. The second point is used vehicle prices. We are likely near the top, and valuations are likely to fall as freight market constraints ease, but currently used inventories are half their year-ago levels, which will cushion that decline. And, when freight volumes do roll-off, there is considerable high-priced capacity that is likely to exit the market, thereby putting a pretty high floor under freight rates.”
ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.
ACT’s 67th Seminar is scheduled for August 23-25, 2022. The focus will be the potential impact of decarbonization and autonomous technology on commercial vehicles and on-highway transportation. Each event ACT shares its best-in-class data and forecast in presentations, as well as featuring guest speakers to dive into topics of interest for the benefit of attendees. The agenda includes key industry leaders, who will be announced at a later date. For more information about Seminar 67 Watts Under The Hood: Transportation Transformation, click here: https://www.actresearch.net/seminar-67/.
ACT Research recently completed POWER UP, a look at 7 global regions and more than 20 countries in a review of local regulations, infrastructure, and the impact on the adoption of battery and fuel cell electric commercial vehicles through 2040. This forecast is the first of its kind, a review of the decarbonization of commercial vehicles around the world. POWER UP is available now at https://www.actresearch.net/power-up/.
Additionally, ACT Research published an update to CHARGING FORWARD, a North American-centric battery and fuel cell electric vehicle adoption rate forecast, covering 23 vehicle applications, in Classes 4-8 commercial vehicles, through 2040. CHARGING FORWARD is considered by many industry leaders to be the apex of analysis and economic-based total cost of ownership modeling in the industry. And, it is now available for purchase at https://www.actresearch.net/electric-vehicles-charge/.
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