Since this article was resealed in 2019, the pendulum has swung the opposite direction...in a major way. North American truck manufacturers saw a decrease in demand in late 2019 and ACT Research projected a further decrease for 2020. Then, the pandemic hit, and everything just stopped.
In the wake of the global shutdowns, we have all witnessed the waterfall of supply chain issues impact every industry, including commercial vehicle manufacturing. From chips to chassis, the ripple effect of March 2020 shutdowns is still being felt in late-2021.
How much freight needs to be shipped vs. how many trucks are available to haul the freight.
The influx of 2018 trucks ordered and built had created a large shipping surplus. With more trucks than freight available, the impact was lower freight rates, a market that favors shippers over carriers.
Today, we're still seeing signs of "stronger for longer" rates that favor carriers, all because the supply chain issues are impacting the production of new, Class 8 tractors. The demand is there, it's palpable! Every major market indicator shows that the market is ripe for new vehicle production. The parts just aren't there!
Instead, OEMs are lining their parking lots with red-tagged (partially completed) vehicles, awaiting parts to wrap these orders and deliver to customers.
The current market, while exaggerated, is a microcosm of the power dynamics of supply and demand, especially the impact of Class 8 tractors on spot and contract rates.
Preparing for these market shifts is exactly the reason ACT's Freight Forecast was created, as a tool to give transportation transparency to shippers, carriers, logistics, brokers, and those working in the supply chain.
For 36 years, ACT Research has been aggregating data on Classes 5-8 truck production and Classes 3-8 used trucks. With this data, ACT has robust new and used truck databases and population models, including mortality curves, to measure the size of the U.S. fleet.
Combining the new production with our used truck data gives ACT Research a unique and unprecedented understanding of the full supply (how many Class 8 tractors are hauling freight) of the market and how many more are to be built over the next 12 months. Just imagine how this insight might change your business planning process?
Is the fleet growing next year?
Will it shrink?
How will this impact your contract negotiations?
Will you need to pass along the cost of inflation to your customers?
What does this mean for your spot rates?
For the first time, understanding the full supply of the market over the next 6-36 months is accessible to your business.
ACT's Freight Forecast can be utilized for rate and volume projections, as well as a negotiation tool for contract and spot rates. Freight rate and volume forecasting service as the bridge of ACT’s leadership in commercial vehicle reporting, award-winning economic analysis with ACT’s transportation industry expertise providing an innovative and comprehensive view of supply and demand in trucking markets. The purpose of this monthly report is to provide visibility to industry professionals across the supply chain on the future of freight transportation economics to help planning and budgeting.
Are you in need of this type of information? Connect with us today to get an unprecedented level of information to help your business in the future. You depend on data. Depend on ACT Research.