The wide-scale distribution of COVID-19 vaccines in the and additional government stimulus in the U.S. will drive economic growth in 2021 and 2022, according to trucking economists.<\/p>\n
As reported by the Trucker magazine, freight volumes got the year 2021 off to a good start with more to come as the vaccine and stimulus continue to pay off.<\/p>\n
\u201cThe headwind of COVID-19 is mixing with the tailwinds of vaccine distribution and economic stimulus,\u201d said Ken Adamo, chief of analytics for DAT. \u201cThere\u2019s still uncertainty about whether consumers will continue to spend, what they\u2019ll buy now and how networks will respond as e-commerce drives more final-mile delivery and fulfillment houses move closer to where customers live.\u201d<\/p>\n
During a three-day virtual seminar hosted by ACT Research Feb., Sam Kahan, chief economist for ACT was equally optimistic.<\/p>\n
\u201cDistribution of effective COVID vaccines and additional government stimulus are drivers of economic growth in 2021 and 2022,\u201d he said. \u201cTransportation and freight activity will shine as a result.\u201d<\/p>\n
One factor that will undoubtedly push freight rates higher is the backlog of ships waiting to unload in West Coast harbors. A nine-month dockworker labor dispute at 29 West Coast ports resulted in dozens of ships left waiting to unload, a process that\u2019s expected to take several months.<\/p>\n
\u201cThe unprecedented backlog of freight waiting to come onshore provides unusually good visibility to strong freight demand, while supply side challenges are keeping the freight markets tight, so we expect the vigorous recovery in carrier earnings and commercial vehicle demand to persist,\u201d said. Tim Denoyer, ACT\u2019s vice president and senior analyst.<\/p>\n
One probable effect of the delay in receiving imports is a potential shortage of parts, including semiconductors needed by U.S. truck manufacturers. Any type of parts shortage can impact production numbers, slowing delivery of new trucks to the market and potentially impacting capacity.<\/p>\n
Tightened trucking capacity is responsible for increased freight rates, including record spot rates set during the fourth quarter of 2020.<\/p>\n
With COVID-19 vaccines becoming more widely available, the economy could soon see businesses that have been shuttered due to pandemic restrictions reopening, including some manufacturers. That\u2019s good news for trucking \u2014 if there is capacity to handle the additional freight.<\/p>\n