With mid-year indicators showing equipment utilization and demand approaching levels never before seen, trucking analysts are working tirelessly to identify how long this current stretch of positivity will last.
In its most recent Transportation Digest, ACT Research reported some of its veteran analysts say the market is as strong as they have ever seen. ACT President and Senior Analyst Kenny Vieth says the market's wild 12-month return to normal ride has reached the "as good as it gets stage," which means the next question is 'When does it all end?"
"From the trajectory of our forecast, it is clear that we think the most likely answer is not any time soon," Vieth says. "Even as a theoretical exercise, it’s worthwhile to run through the array of signals to watch for early, actionable signs of a pending change in direction."
Vieth says those include considerations like the yield curve, commodity prices, stock prices, purchasing mangers’ surveys, spot freight rates, and ACT Research’s Class 8 Tractor Dashboard — which hit an all-time high earlier this month.
Additionally, while freight and shipping data normalized a bit last month — ATA's tonnage index fell by 0.7 and FTR's Shippers Condition Index bounced back after a record low reading in April — neither shift is believed to signal any significant market softening. Falling equipment demand in April and May have been linked to order board availability not customer demand, and as some OEMs opened their order boards for 2022 this month, June equipment orders are expected to grow again.
“Near term, volumes will be dictated by OEM and supplier capacity; the market will take as many trucks, tractors, and trailers as the manufacturers can make for this year and deep into next year,” Vieth says.