ACT: Carriers Add Capacity, While US Industrial Downturn Deepens

According to ACT Research’s latest State of the Industry: Classes 5-8 Report, parts of the freight economy may be flashing the occasional “green shoot,” but it is not completely clear whether the industry has reached the nadir of the current freight cycle.

“Despite the fact that carriers are showing signs of pulling back, they continue to add capacity, with all-time record retail sales in September as a testament to the phenomenon,” said Steve Tam, ACT Research vice president. “Unfortunately, they could not do so at a worse time. Uncertainty with respect to trade and tariffs abounds, and as a result, the US industrial downturn appears to be deepening, with rail volume weakness spreading to all segments and declines worsening. Even consumers, who have remained undaunted thus far, are giving some cause for concern, with medium duty orders notably below trend in October.”

Speaking about the Class 8 market, Tam said, “Following weak freight volumes and rates, forward-looking indicators portend expected slowing. October marks the first manifestation of the recognition of the unsustainability of elevated production levels.”

Regarding the medium duty markets, he commented, “Activity in the medium duty segment remains considerably more stable than for its heavy-duty counterpart, but is also displaying growing signs of fatigue, particularly in order intake, output and inventory levels.”

ACT’s State of the Industry: Classes 5-8 report provides a monthly look at the current production, sales, and general state of the on-road heavy and medium duty commercial vehicle markets in North America.

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