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ACT Research says freight recession likely

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ACT says its Dashboard guidance at the end of 2018 suggests today’s order weakness will transition from “too much backlog” to an equipment supply-freight demand imbalance in the near future. (The Trucker file photo)

COLUMBUS, Ind.  – According to ACT Research’s (ACT) latest release of the North American Commercial Vehicle Outlook, a freight recession is not out of the question, but the easier call is a rate recession as truck supply-freight demand fall out of balance.

“While there is a very low probability and no expectation of an economy-wide recession in 2019, freight-related data points have been sufficiently bad in breadth and duration to note that a freight recession is possible, although unlikely,” said Kenny Vieth, ACT’s president and senior analyst. “That said, slower freight growth, an easing of driver supply constraints, the resumption of the long-run freight productivity trend, and strong Class 8 tractor fleet growth will increasingly pressure rates and by extension, trucker profitability in 2019.”

Regarding heavy vehicle demand, Vieth said the rolling-over of ACT’s Dashboard guidance at the end of 2018 suggests today’s order weakness will transition from “too much backlog” to an equipment supply-freight demand imbalance in the near future.

Despite his cautious tenor, Vieth said that the heavy commercial vehicle market continues to benefit from a still-broad spectrum of supply and demand-side triggers, including still-strong carrier profits, desirable new technologies, better fuel economy, and for trailers increased demand for drop-and-hook to keep drivers moving.

Regarding ACT’s medium duty forecasts, Vieth said preliminary February net orders were moderately above the current trend.

“Orders averaging 24,100 units per month for the past six months have diminished from the strong upward pressure they exerted on the forecast in the first half of 2018,” he said.

ACT Research is a publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasting services for the North American and China markets.

For more information, visit .

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Landstar names Ike Tate as 2018 Safety Officer of the Year

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Landstar President and CEO Jim Gattoni, right, presents the Landstar Safety Officer of the Year Award to Ike Tate (Courtesy: LANDSTAR SYSTEM)

JACKSONVILLE, Fla. — Landstar System, a worldwide, asset-light provider of integrated transportation management solutions, presented the 2018 Landstar Safety Officer of the Year Award to independent Landstar Agent Ike Tate during Landstar’s Annual Agent Convention held recently in Marco Island, Florida.

Landstar requires each of its 1,300 independent agents to name an individual responsible for the safety performance of their agency. The designated Landstar Safety Officer (LSO) promotes safe, secure and compliant driving, participates in Landstar’s network-wide monthly Safety Thursday Conference Call and supports customer safety initiatives.

Each month, Landstar names one LSO of the Month, from which the Landstar Safety Officer of the Year is selected. Tate, of Charlotte Express Center, based in Charlotte, North Carolina, was first recognized as a LSO of the Month in May 2018 after hosting a Landstar safety meeting focused on the dangers of distracted driving. Charlotte Express Center also conducted three Mutual Understanding of Safety Together or M.U.S.T. customer visits during 2018. And, with more than 2.6 million Landstar business capacity owner (BCO) miles booked in 2018, the agency had no preventable accidents or cargo claims on any shipments it arranged during the year.

During a ceremony held April 6, 2019, Mike Cobb, Landstar Transportation Logistics vice president of safety and compliance, presented the award to Tate. “Ike is a prime example of a true leader in safety,” Cobb said. “His agency supports its customers and community with Landstar’s safety initiatives.”

Cobb said Tate, like the 11 other 2018 LSO of the Month finalists, represents an agency with an impeccable safety record, very low accident and cargo loss frequency rates, and a staff that continuously looks for ways to improve safety.

“He demonstrates a constant commitment to safety by regularly participating in safety initiatives and following Landstar’s Complete and Accurate Dispatch procedures,” Cobb said.

 

 

 

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ACT: Freight recession possible, rate recession likely

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Tim Denoyer, ACT Research’s vice president and senior analyst said the slowdown in freight is happening just as truckload capacity is accelerating. (Courtesy: ACT RESEARCH)

COLUMBUS, Ind. — A freight recession is possible and a rate recession is likely, ACT Research said in a new monthly report focusing on the future of the U.S. trucking industry.

The report covers the truckload, intermodal, LTL and last mile sectors.

“Truckload spot rates are set to soften further because of tractor capacity additions, pulling the contract rate market down by mid-year. LTL rates will be most resilient and continue to rise due to the unique dynamics in that market, but TL and intermodal rates are heading lower,” said Tim Denoyer, ACT Research’s vice president and senior analyst.

Dry van rates, net fuel, fell 15% year-over-year in the first quarter and are likely to drop 20% year-over-year in the coming months, Denover said.

Freight growth has slowed materially, and it’s not just timing effects from shippers positioning around tariff threats. The headwinds to for-hire freight volumes in 2019 include tariffs, tighter financial conditions, the industrial slowdown, housing and auto softness, and fast private fleet growth, he said.

“While this presents risk of a freight recession in 2019, we do expect the U..S consumer to keep volumes growing, just very slowly,” Denover said. “Critically, this slowdown in freight is happening just as truckload capacity is accelerating. After growing less than freight for most of last year, truckload capacity has accelerated to 7% year-over-year growth in early 2019. We think this is the key story behind lower spot rates and why the pricing pendulum is starting to swing to the shipper.”

ACT’s Freight Forecast also includes a last mile section, which argues changing supply chains are beginning to impact equipment purchasing, though the Class 8 tractor sleeper is having quite a strong cycle.

ACT Research is a publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasting services for the North American and China markets.

More information can be found at .

 

 

 

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