ACT Research began its 67th Seminar, Watts Under The Hood: Transportation Transformation, on August 23 with a discussion reception—a long-standing ACT seminar tradition—hosting their guests by offering dinner and discussion before the second day of presentations and panel discussions got going. The focus of ACT’s 67th Seminar was 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 features guest speakers who dive into topics of interest for the benefit of attendees.
Day two of ACT Research’s semi-annual Outlook Seminar spotlighted a concentration of industry speakers talking about the advancements in and deployment of autonomous technology. The day began with a US economic panel—moderated by Jim Meil, Principal, Industry Analysis at ACT, and featured Patrick Manzi, Chief Economist at NADA, and Paul Traub, Chief Economist at ACT—followed by presentations from guest speakers with expertise and experience in the commercial vehicle industry. Guests heard from a broad range of perspectives regarding topics such as:
- the supply-chain issues that have bedeviled the commercial vehicle industry and how OEMs have been navigating them (Paul Rosa, Penske, Sr. Vice President – Procurement & Fleet Planning);
- the reality of autonomous passenger vehicles, currently being tested throughout the heavy-duty trucking environment as well, and what this innovation may mean for efficiency, safety, and addressing the persistent driver shortage (Craig Harper, J.B. Hunt, Chief Sustainability Officer, EVP and John Verdon, Waymo, Business Development and Partnerships);
- the deployment of autonomous trucks and their position to deliver high value across the transportation industry (Alan Ghelberg, Aurora, VP Corporate Strategy);
- an OEM perspective on the adoption of autonomous technology and the ecosystem required to support L4 autonomous driving adoption (Srinivas Gowda, Navistar, VP of Autonomous Driving);
- and the consideration of climate change and alternative power solutions with sustainability in mind (Chad Dittberner, Werner, SVP Van/Expedited Division and Puneet Jhawar, Cummins, GM - Global Natural Gas Business).
The presentations were rounded out by a dealer panel moderated by Steve Tam, ACT’s Vice President, and featured Steve Bassett, President of General Truck Sales; Laura Perrotta, President of American Truck Dealers; and Rusty Rush, CEO of Rush Enterprises.
An exciting bonus to the day was the ride along featuring Hyliion’s Hypertruck ERX—an electrified drivetrain Class 8 truck that recharges itself by efficient en route charging. In conjunction with ACT’s lodge dinner, guests could take a ride and see the technology firsthand that Thomas Healy presented earlier in the day.
Day three of ACT Research’s semi-annual Outlook Seminar included several market update presentations featuring:
- a used truck market update, covering ACT’s current market overview and opine on where the used truck market is likely headed and causes behind the market move (Steve Oliver, Taylor & Martin, National Director of Sales and Steve Tam, ACT Research Vice President);
- a freight and transportation update/forecast, covering economic fundamentals in the trucking industry, forecasts for freight rates and fleet financial performance, and implications for equipment demand (Tim Denoyer, ACT Research, Vice President & Senior Analyst);
- a Class 8 update/forecast, covering factors surrounding the near-term outlook and potential for market disruptions (Kenny Vieth, ACT Research, President & Senior Analyst and Eric Crawford, ACT Research, Vice President & Senior Analyst);
- a US trailer market review/forecast, covering how pent-up demand, supply-chain issues, and potential recession may impact the trailer markets (Eric Crawford, ACT Research, Vice President & Senior Analyst and Jennifer McNealy, ACT Research, Director, CV Market Research & Publications);
- and a medium-duty market update, covering the current market, where it is likely headed in the coming few years, and why it’s behaving differently this time around (Steve Tam, ACT Research, Vice President).
Regarding the used truck market, Steve Tam, Vice President at ACT Research, commented, “Out-of-control demand and short supply sent truck prices into all-time records earlier this year. Values are cooling quickly now. How fast and far they will fall depends on a complex set of factors that manifest in the precarious balance of trucks and the freight to be hauled.” When asked about the medium-duty market, he added, “Supply-chain challenges continue to deny medium-duty truck buyers the equipment they want and need. All indications point to still-strong demand that will hopefully get some much-needed relief in the next year or so.”
Regarding freight and transportation update and forecast, Tim Denoyer, Vice President, Senior Analyst at ACT Research, said, “Amid a very strong seminar agenda, the freight presentation was a crucial one as it discussed the landscape of the US trucking industry as it navigates a challenging state of the cycle. The Freight Forecast sees a looser truckload market persisting for some time, with major implications for heavy truck demand, but the seeds of the next upcycle are already being sown.”
Kenny Veith, President & Senior Analyst at ACT Research commented on the Class 8 market, with “If there is a silver-lining to the supply constraints that have impeded Class 8 production this cycle, it is the absence of significant overcapacity in the face of the hard roll-over in economic activity. Without that typical equipment overhang weighing on carrier profits, the downturn in HD equipment demand is projected to be shallower than would typically be seen at the end of a freight cycle.” He added, “We are not just contemplating the impact of excess units in the field as good for future Class 8 demand, but also dealer stocks, which are atypically balanced with sales at this juncture. Relative inventory balance is an unprecedented end-of-cycle outcome, and removes a significant drag on demand typically seen as the freight cycle rolls off.”
When asked to comment on the US trailer market, Jennifer McNealy, Director, CV Market Research & Publications at ACT Research, shared, “US trailer demand remains strong, and supply-chain disruptions are easing. Labor remains the primary constraint to higher production volumes. Total industry backlog now stretches into Q2’23, with only partial 2023 orderboards open. Cancellations, meanwhile, remain de minimis.” Regarding the trailer forecast, Eric Crawford, Vice President, Senior Analyst at ACT Research, added, “For 2022, easing supply-chain disruptions and still-strong demand have led to recent upward revisions to our US trailer build forecast (~311k units). We would consider raising our 2022 build forecast even higher, but labor availability remains a constraint across the industry.” He concluded, “We still expect healthy production in 2023 (~318k units), as our channel checks indicate still very strong appetite for what 2023 build slots have become available. That said, higher interest rates and our view that a recession is inbound have led us to reduce our 2023 and 2024 forecasts in recent months, and we expect a decline in 2024 build (-11% y/y).
The final day of the seminar closed with a casual lunch at the historic, old-fashioned ice cream parlor, Zaharakos.
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 Freight 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.
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 68th Seminar is scheduled for February 21-23, 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 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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