• You Are Here: Home > News
  • > ‘Perfect Storm’ Brewing in Trucking: ACT
‘Perfect Storm’ Brewing in Trucking: ACT

ACT’s heavy-duty forecast continues to reflect the current ‘perfect storm’ of upbeat economic, freight and trucking indicators on the verge of reaching, all-time record levels, said Kenny Vieth, ACT’s president and senior analyst.

“And, it’s easy, if not particularly pleasant, to remember the business environment of 2020’s second quarter, with significant uncertainties in not knowing the extent of the virus and how deep the downside could be.”

But, Vieth added, “All that said, good times and good numbers at a macro level obscure an uncomfortable truth – life in the trenches is a jungle right now. For purchasing managers in the equipment manufacturing chain, the struggle is obtaining supplies in a capacity-strained world, while for financial managers, it’s a battle to protect margins against rapidly rising costs. Fleet managers always have the driver shortage headache, but are now stressed because the queue for heavy-duty vehicles stretches past year-end, even as many operators need new trucks today. The management skillset is really being tested to make the best of current good times, if this is really ‘as good as it gets’.”

Meanwhile, ACT Research’s For-Hire Trucking Index pointed to the strongest rates in April since it began tracking the data, despite some easing of freight volumes.

The supply-demand balance remained tight, ACT reported, but is beginning to show signs of rebalancing.

“With both driver and equipment capacity in short supply, we are witnessing the strongest rate environment in survey history, even with a bit slower volumes.”

As Covid restrictions continue to be eased, the driver shortage could improve and spending habits may shift back towards services rather than goods, which could bring some balance to the trucking landscape.

“The supply chain constraints imply pent-up demand is still building, and the near-term freight volume outlook remains very positive. This should keep the market tight, but we expect the rebalancing trend to continue in the medium-term. The risks are that substitution back to service spending gradually cools the freight volume environment and that the eventual end of extended unemployment insurance helps driver availability improve.”

Share This Story