“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,” Tim Denoyer, ACT Research’s vice president and senior analyst, said. “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,” Denoyer said. “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.”
“Manufacturing and construction, two crucial freight generating sectors, will be the first to reopen under many states’ plans,” Denoyer continued. “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.”
Denoyer 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.”
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. The Freight Forecast provides detail on the future of freight rates, helping companies across the supply chain plan their business with greater visibility and less uncertainty.
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