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Saturday, October 24, 2020

ACT Research Freight Forecast: Spot Pressure to Persist on More Capacity Additions 


ACT Research released the October instalment of the ACT Freight Forecast, U.S. Rate and Volume OUTLOOK report covering the truckload, intermodal, LTL and last mile sectors. After a less negative spot environment over the summer, ACT now expects excess capacity to exert more downward pressure on truckload spot rates. ACT Research also introduced its Q3’20 truckload spot rate forecasts in this month’s report.

The ACT Freight Forecast provides quarterly forecasts for the direction of volumes and contract rates through 2020 and annual forecasts through 2021 for the truckload, less-than-truckload and intermodal segments of the transportation industry. For the truckload spot market, the report provides forecasts for the next twelve months. The ACT Research Freight Forecast provides an unprecedented look at the future of freight rates to help businesses in transportation and logistics management plan for the future with confidence.

Tim Denoyer, ACT Research’s Vice President and Senior Analyst, said, “The rebalancing trend is still valid for 2020, but we think Q4 spot rates will actually fall from Q3 this year, counter to the seasonal pattern, due to the supply/demand imbalance detailed in the Freight Forecast report.”

He continued, “We see the signs that capacity is beginning to come at the margin in some places, from company failures to lower for-hire employment data, but the industry still added about 5,000 net new tractors to the US highways last month. This reflects ongoing capacity additions by private fleets, as the for-hire sector isn’t the problem. This will change next year, but this rate of capacity addition will continue through year-end.”

Freight softened in recent weeks, following the September 1st tariff imposition, and after a brief respite earlier in Q3, the freight recession is showing signs of broadening amid weaker industrial indicators. While holiday spending and pre-tariff inventory building may help volumes in Q4, we continue to see heightened risk of weak freight volume in early 2020 as inventories draw down.

ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.

ACT’s 62nd seminar is scheduled for February 11-13, 2020, and will feature trucker, electrification, and economic panels, as well as discussions on near-term demand of North American commercial vehicle markets and the pending impact of electrification on the market in the near future. A commercial vehicle database workshop is also being planned in conjunction with this semi-annual event.

Source:  ACT Research