Again as a result of the COVID-19 pandemic, ACT Research began its 65th Seminar on August 24 via a virtual platform, with a panel discussion about the current state and future of US economics. Panelists included Jon Horvath, Director Economics and Marketplace Dynamics at C.H. Robinson, as well as ACT’s Principal, Industry Analyst, Jim Meil, and Chief Economist, Sam Kahan.
Kahan noted, “The economy continues to approach normality, and the current strong pace of real GDP is likely to slow as time progresses to a still-solid pace. That said, COVID and fear of inflation, with regional and industrial differences, remain challenges.” He added, “Freight and transportation continue to shine, but how component supply chains, volumes, profitability, innovation and labor will respond is tomorrow’s focus.”
Regarding inflation, Meil explained, “The near term outlook is faced with two principal threats, first and foremost, the fourth wave of COVID due to the Delta variant, and a resurgence of inflation. Even if the inflation issue is transient from a macro-perspective, it will leave its mark on the trucking and transportation industry.” He added, “Sources of the inflation threat are front and center for trucking and transportation. Energy prices at the end of August are 50% higher than they were at this time last year, even if oil prices have retreated from July highs. The semiconductor problem, supply and prices, is a well-publicized issue impacting a number of industries. Steel prices are two times higher now than they were at the start of 2021. Whether or not they retreat, they increase risk and uncertainty for the next four to six quarters.” Additionally, Meil commented on the global picture, saying, “There are clear similarities between the North America and global scenes – positive tailwinds for Europe, Japan, China, and much of South America, but potential problems as the world deals with the COVID threat.”
ACT Research holds two seminars per year for the benefit of its N.A. CV OUTLOOK and Freight Forecast: U.S. Rate and Volume OUTLOOK subscribers. The N.A. CV OUTLOOK is a robust report that forecasts the future of the industry, looking at the next 1-5 years, with the objective of giving OEMs, Tier 1 and Tier 2 suppliers, and investment firms the information needed to plan accordingly for what is to come. The report provides a complete overview of the North American markets, as well as takes a deep dive into relevant, current market activity to highlight orders, production, and backlogs, shedding light on the forecast. Information included in this report covers forecasts and current market conditions for medium and heavy-duty trucks/tractors, and trailers, the macroeconomies of the US, Canada, and Mexico, publicly-traded carrier information, oil and fuel price impacts, freight and intermodal considerations, and regulatory environment impacts. The monthly 56-page ACT Freight Forecast report provides forecasts through 2023 for volumes and contract rates for the truckload, less-than-truckload and intermodal sectors of the transportation industry, including the Cass Shipments Index and Cass Truckload Linehaul Index®. For the truckload spot market, the report forecasts rates through 2022. The Freight Forecast provides unmatched detail on the freight rate outlook, helping companies across the supply chain plan with greater visibility and less uncertainty.
Regarding the North American medium duty market, Steve Tam, ACT’s Vice President, noted, “Demand is on fire in the medium duty market, but supply is dampening down the flames. Orders are up almost 75% year-to-date, with 2021 well poised to be the best order year in history.” He added, “Despite red hot demand, the supply chain’s inability to provide all of the necessary parts will keep a lid on production and sales in 2021 and into 2022. NA Classes 5-7 retail sales are expected to total about 255,000 units in 2021, increasing to 265,000 in 2022.” Tam also commented about the impact of electrification and autonomy for this CV sector, saying, “Thanks to a better alignment of current battery technology and capability, light and medium duty vehicles are expected to see greater adoption of electrification than their heavy duty counterparts. Conversely, Class 8 vehicles are expected to have a greater cost advantage than light and medium duty vehicles from the implementation of autonomous technology, making the heavier vehicles the most likely innovators.”
Frank Maly, ACT’s Director, CV Transportation Analysis & Research shared a review of the US trailer market. He commented, “Fleets have a long-term balance in how the ratio of trailer and truck orders normally proceed. The reluctance of trailer OEMs to book orders in recent months has pushed trailer orders well under their normal level. That pent-up demand, along with the industry’s normal upcoming order season, has set up the potential for a flood of orders to be placed before year-end.” Maly added, “Trailer OEMs continue to struggle to ramp production in response to current fleet demand. As a result, current orderboards stretch to early April 2022, on average, at current production rates. Dry van and reefer backlogs extend even further.”
The three-day virtual seminar continues on August 25, when Steven Wolverton, Product Planning Manager-Powertrain at Peterbilt Motors, from PACCAR, will provide an OEM’s perspective on advancing technology, Alan Dowdell, Vice President, Business Development of Wrightspeed will discuss electric battery powertrains, and Bill Zobel, Executive Director of the California Hydrogen Business Council will share the future of hydrogen technology with attendees. Additionally, Aaron Jefferson, Vice President of Product for Luminar Technologies will detail the relationship of autonomous technology and commercial vehicles, followed by a review of the US used truck market by Steve Oliver, National Sales Director at Taylor & Martin, and the Class 8 review and forecast to be given by Kenny Vieth, ACT Research’s President and Senior Analyst.
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 66th Seminar is scheduled for February 22-24, 2022. Look for more details on this event over the coming months and save the date for February’s event. When details are available, they may be found at www.actresearch.net.
ACT’s commercial electric vehicle study, Charging Forward: 2020-2024 BEV & FCEV Forecast & Analysis, was published on March 31, 2021, after months of extensive research. Utilizing industry expertise and analysis, as well as the input from a comprehensive list of key industry study participants, ACT Research has developed a critical guide for battery electric and fuel cell electric unit build and sales forecasts over the next two decades. With coverage of Classes 4-8 commercial vehicles, ACT has identified 14 market subsegments and more than 20 application types; this one-of-a-kind report is a must-have for those investing or investigating electric power opportunities. To learn more or to purchase this report, click here.