ACT Research released the latest installment of the ACT Freight Forecast, U.S. Rate and Volume OUTLOOK report. Tim Denoyer, ACT Research’s Vice President and Senior Analyst, said, “Pushing commercial vehicle demand forward, freight rates ended February at record levels, seasonally adjusted, and started March on an upswing.”
He continued, “With the nation’s ports backed up for months, commodity prices soaring, the manufacturing sector warming up, and the housing market already in full swing, there is unparalleled visibility to strong freight flows.”
Regarding the truckload spot rate market, Denoyer noted, “We see more increases on the horizon with a very strong freight volume pipeline and Class 8 production restrained by semiconductor and other parts shortages. We see the latest federal COVID-19 relief package adding to both freight demand and the challenges of re-engaging supply, which presses our spot rate forecasts higher this month.”
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 sectors of the transportation industry. For the truckload spot market, the report forecasts rates for the next 12-15 months.
Backlogs Still Growing as Net Trailer Orders Remain Solid
Preliminary reports indicate that February's net order volume of 24,200 trailers was up 82 percent from the same month last year. That was also down 21 percent from January 2021 bookings. Final February volume will be available later this month.
“Given last year’s COVID-related softer economy, year-over-year improvement for net orders is a foregone conclusion over the next few months. February’s sequential decline in net orders was a bit larger than seasonal patterns would project, but was directionally correct,” said Frank Maly, Director CV Transportation Analysis and Research at ACT Research. He added, “Preliminary results for the month still show that the industry backlog continued to grow in February, reaching the highest point since March 2019. With many OEMs reporting their capacity committed for the year, there may be some reluctance to push the backlog horizon out even further, on both the part of OEMs and fleets.” Maly further noted, “The backlog horizon will be pulled forward in response to higher OEM build rates. February prelims indicate that goal remains elusive, with minimal increases in production rates last month. Our discussions indicate that staffing remains the primary headwind impeding higher production, with component and material supplies also noted as concerns. Fleets want to add more trailers to their operations, but would certainly like more advantageous delivery timeframes.”