ACT Research Freight Forecast: Bottoming Process Beginning for the Trucking Cycle

Massive economic pressure will weigh on freight volumes for a long time

Tim Denoyer, ACT Research’s Vice President and Senior Analyst, said, “Massive economic pressure will weigh on freight volumes for a long time, excess capacity is still material, and the mid-term outlook remains very uncertain. On a seasonally adjusted basis, container imports fell 20% in the two months from January to March, and similar declines on a year-over-year basis will likely be with us at least into the summer.”

“However, we think these factors are largely reflected in current depressed truckload spot rates, which have fallen about 20% since March. We doubt this will mark the bottom, but with new dynamics of significantly lower supply and incrementally improving demand, we think rates are close to bottom, with at least seasonal improvement likely in the near-term.”

He continued, “Manufacturing and construction, two crucial freight generating sectors, will be the first to reopen under many states’ plans. The reopening will be tentative, as some manufacturers will restart at half-staff for social distancing and many will direct previously productive time each day for cleaning. So, capacity utilization will be painfully low for some time, and the reopening will also be incredibly fragile, as additional waves of the virus are likely to cause additional shutdowns.”

He concluded, “Beyond the near-term, we are not forecasting a straight line up, but see a bottoming process beginning that will eventually lead to better days for carriers.”

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