ACT Research released the March installment of the ACT Freight Forecast, U.S. Rate and Volume OUTLOOK report covering the truckload, intermodal, LTL and last mile sectors.
The monthly 56-page ACT Freight Forecast report provides three-year forecasts for volumes and contract rates for the truckload, less-than-truckload and intermodal segments of the transportation industry, and for the truckload spot market, the report forecasts the next twelve months. The Freight Forecast provides unmatched detail on the future of freight rates, helping companies across the supply chain plan their business with greater visibility and less uncertainty.
Tim Denoyer, ACT Research’s Vice President and Senior Analyst, said, “There’s not much freight in a basketball game, and the outlook for capacity is tighter, as COVID-19 and financial volatility will likely further lower new equipment purchasing. Freight could be less affected than the overall economy in a service-side recession, the risk of which has risen. At this point, we expect a sharp but short decline in economic activity, but the situation continues to evolve quickly. With a likely inventory restock in the second half, among several tailwinds, there is a case for recovery in freight. And with capacity coming, we think the outlook for improving truckload rates is fairly resilient to COVID-19.”
On the data front, we highlight the first signs of the impact of COVID-19 on US freight. The most recent weekly Class 1 rail data suggests COVID-19 effects washed onto North American shores in the last week of February. In the week ending February 29 (week 9), NA Class 1 intermodal volumes fell 12% y/y, 7ppts below an already weak 2020 ytd trend of -5% through eight weeks. Predictably because of proximity to China, the impact started on the US Western railroads, BNSF and UP. With longer steaming times, we would expect the Eastern railroads to experience lower volumes shortly.
What differentiates ACT’s freight service is an unparalleled understanding of Class 8 tractor capacity. Our data science tells us capacity is the main driver of rates in the long-term. Themes for 2020 explored in this month’s report include:
o Capacity Rebalancing
o Spot Rates Turning Positive
o Trade Policy/Industrial Downturn
o End of the Freight Recession
o How Contract Rates Could Turn Positive in 2020
o Looking Forward to 2021
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.
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