According to ACT Research’s recently released Transportation Digest, the shock waves of the COVID-19 recession continue to depress both the North American and global economies, with June marking the fourth month of what will go down in the record books as the most severe business cycle downturn since the Great Depression. The report noted that the extent of the shock was a near total surprise to businesses and forecasters in the months of March and April.
“In February, when the impact of the coronavirus was still viewed skeptically, ACT Research anticipated a 33 percent drop in Class 8 North American retail sales in 2020, but of course that worsened as the full impact of the virus began to reveal itself,” said Kenny Vieth, ACT’s President and Senior Analyst. “The impact of COVID-19 was to take a flattish economy and push it over the cliff.”
Vieth continued, “Paradoxically, freight surged as the economy fell, with a stampede to stuff pantries, a rush on medical supplies, an uptick in technological products for work-from-home demand, and a build-up of safety stocks behind the March transportation spike.”
He further explained, “As the recession tightened its grip, April marked the low point for freight, with daily indicators on loads, tender volumes and freight rates hitting bottom. That said, even as high-level macro indicators, like employment and industrial production, showed decline, freight started to recover in late April and into May, reflecting the nascent revival of supply chain activity. These same daily indicators showed improvement and growing momentum all through May.”
Vieth remains cautiously optimistic that there is an end in sight economically, “We continue to anticipate a transition into a slow recovery, that will gain speed as we proceed through the second half of this year and into 2021, with the caveat that there are still many unanswered questions about the trajectory of the virus and the impending recovery.”
The report, which combines proprietary ACT data and analysis from a wide variety of sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets. This monthly report is designed as a quick look at transportation insights for use by fleet and trucking executives, reviewing top-level considerations such as for-hire indices, freight, heavy and medium duty segments, the U.S. trailer market, used truck sales information, and an overview of the U.S. macro economy.