ACT Freight Forecast: Capex Boom Benefits Freight Demand

ACT Research released the latest installment of its ACT Freight Forecast, U.S. Rate and Volume OUTLOOK report.

“One decidedly different factor becoming clear in this economic recovery is that the ceiling on the capital goods cycle has been decisively broken for the first time since the late 1990s,” Tim Denoyer, vice president and senior analyst of ACT Research, said. “While not as large as retail in terms of overall freight generation, capital goods spending is freight intensive, and the coming CAPEX boom will certainly benefit freight demand in the next few quarters.

“May’s surge in the Cass Shipments Index surpassed expectations amid strong freight fundamentals, with the second-best result in its long history. Soaring freight demand has been overwhelming the industry’s capacity these past 10 months as the industry continues to cope with bottlenecks and shortages in this extraordinary recovery.

“While the pendulum of pricing power is clearly with the asset owners, we analyze several leading indicators which suggest it will begin swinging back to shippers in the coming months, with rebalancing likely in 2022.”

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