ACT Updates Freight Forecast for COVID-19 and Lower Commodities
MAR 16, 2020 - 6:45 am
ACT Research released the March installment of the ACT Freight Forecast, U.S. Rate and Volume OUTLOOK report covering the truckload, intermodal, LTL and last mile sectors.
Tim Denoyer, ACT Research’s vice president and senior analyst, said, “There’s not much freight in a basketball game, and the outlook for capacity is tighter, as COVID-19 and financial volatility will likely further lower new equipment purchasing. Freight could be less affected than the overall economy in a service-side recession, the risk of which has risen. At this point, we expect a sharp but short decline in economic activity, but the situation continues to evolve quickly. With a likely inventory restock in the second half, among several tailwinds, there is a case for recovery in freight. And with capacity coming, we think the outlook for improving truckload rates is fairly resilient to COVID-19.”
On the data front, ACT highlights the first signs of the impact of COVID-19 on U.S. freight. The most recent weekly Class 1 rail data suggests COVID-19 effects washed onto North American shores in the last week of February. In the week ending February 29 (week 9), North American Class 1 intermodal volumes fell 12% year over year, 7ppts below an already weak 2020 year to date trend of -5% through eight weeks. Predictably because of proximity to China, the impact started on the U.S. Western railroads, BNSF and UP. With longer steaming times, ACT would expect the Eastern railroads to experience lower volumes shortly.
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 segments of the transportation industry, and for the truckload spot market, the report forecasts the next 12 months. The Freight Forecast provides unmatched 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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