“The headwind of COVID-19 is mixing with the tailwinds of vaccine distribution and economic stimulus,” said Ken Adamo, chief of analytics for DAT. “There’s still uncertainty about whether consumers will continue to spend, what they’ll buy now and how networks will respond as e-commerce drives more final-mile delivery and fulfillment houses move closer to where customers live.”
During a three-day virtual seminar hosted by ACT Research Feb., Sam Kahan, chief economist for ACT was equally optimistic.
“Distribution of effective COVID vaccines and additional government stimulus are drivers of economic growth in 2021 and 2022,” he said. “Transportation and freight activity will shine as a result.”
One factor that will undoubtedly push freight rates higher is the backlog of ships waiting to unload in West Coast harbors. A nine-month dockworker labor dispute at 29 West Coast ports resulted in dozens of ships left waiting to unload, a process that’s expected to take several months.
“The unprecedented backlog of freight waiting to come onshore provides unusually good visibility to strong freight demand, while supply side challenges are keeping the freight markets tight, so we expect the vigorous recovery in carrier earnings and commercial vehicle demand to persist,” said. Tim Denoyer, ACT’s vice president and senior analyst.
One probable effect of the delay in receiving imports is a potential shortage of parts, including semiconductors needed by U.S. truck manufacturers. Any type of parts shortage can impact production numbers, slowing delivery of new trucks to the market and potentially impacting capacity.
Tightened trucking capacity is responsible for increased freight rates, including record spot rates set during the fourth quarter of 2020.
With COVID-19 vaccines becoming more widely available, the economy could soon see businesses that have been shuttered due to pandemic restrictions reopening, including some manufacturers. That’s good news for trucking — if there is capacity to handle the additional freight.