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Commercial Vehicle Markets Surprisingly Strong

| September 11, 2020

ACT Research reports that current imbalance between freight demand and driver supply pushed dry van spot freight rates to all-time highs

According to ACT’s latest release of the North American Commercial Vehicle OUTLOOK, while other areas of the economy continue to suffer, North American commercial vehicle market metrics are returning positive indicators.

According to Kenny Vieth, ACT’s President and Senior Analyst, said, “While COVID has triggered the most severe recession since the Great Depression, economic activity has been on a solid recovery path since the April swoon.” He added, “Despite that upward movement, some economic sectors remain mired in deep recession. The story for the transportation sector broadly and for heavy duty trucks specifically can be summed in two words: surprisingly strong.”

Vieth continued, “From the initial federal response to the pandemic to changes in consumer behavior stemming from the virus, there have been a number of factors that have contributed to significantly better freight outcomes.” He explained further, “Two numbers illustrate the shift from consumer spending on experiences to spending on the goods that represent freight demand. Consumer spending on durable goods in July was 10.5% higher than it was in January. Over the same period, spending on services fell 9.7%. On the supply side of the equation, considerable sidelined driver capacity has constrained the trucking industry’s ability to haul freight.” Vieth concluded, “The current imbalance between freight demand and driver supply pushed dry van spot freight rates to all-time highs in August, a key barometer for new equipment demand. Offsetting the good news is considerable parked heavy truck capacity that will return to the market, leading us to make the case for a steady, rather than robust, Class 8 market rebound into the first half of 2021.”

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