Robust conditions for freight volumes and commercial vehicle demand indicate a strong future for the U.S. economy, according to a report today from industry analyst firm ACT Research.
The assessment follows recent reports from the Columbus, Indiana-based firm showing that booming demand for freight transportation has pushed orders for new trucks near an all-time high as pandemic lockdowns continue to ease.
Those trends have remained on track to continue their expansion, as supply chains continue to flex their muscle and keep pace with a rapid rebound from the Covid-19 recession.
“From an economic standpoint, GDP growth is strong, consumers continue to spend at a relatively higher rate on goods, and other freight-intensive sectors remain the primary drivers of economic activity,” Kenny Vieth, ACT’s president and senior analyst, said in a release. “This leads to the view we have from our freight-perspective glasses: Spot freight rates continue to post new record levels and are currently inverted above contract rates, a clear signal that contract rates will continue to rise. Additionally, low business inventories and backed-up ports on both coasts have created a backlog of freight, providing excellent forward visibility of ongoing strong demand for freight services.”
That environment will likely push carrier profitability to reach records levels in coming quarters, ACT forecasts. “As we’ve often opined, fleets buy, or at least order, equipment when they are making money,” Veith said. “Orders for medium-duty trucks, heavy-duty tractors, and trailers remain elevated, and with demand hot and production constrained, backlogs are extended beyond traditional ranges.”