ACT Research: Forecast Expectations for Dry Van Market Pulled Back Due to Power-Only Brokerage
As published in the latest release of the North American Commercial Vehicle OUTLOOK, expectations for Class 8 and trailers remain relatively the same in November, though forecasts for dry van trailers are pulled back due to a recalibration of our expectations regarding power-only brokerage.
“To accomplish the scheme of introducing drop-and-hook productivity into the small carrier spot market was a plan by large fleets and brokerages to boost trailer-to-tractor ratios, build trailer pools, etc., into the wildly growing pandemic stimulus and supply-chain constrained spot market,” according to Kenny Vieth, ACT’s President and Senior Analyst. “From Q1’21 to Q2’22, DAT’s spot market postings averaged nearly 4.9 million loads per day. Year to date, DAT’s spot posts have averaged less than 1.4 million loads per day, a 71% decline from the heady average experienced at the peak of the pandemic freight bubble.”
The sharp rise and fall in spot market activity reflects a lot of freight getting to where it was originally intended to go, but couldn’t due to capacity limitations in private fleets and other dedicated operations. Pulling back on this heretofore anticipated ratio expansion lowers the trajectory of the dry van market.
Vieth concluded, “One of the things staying our hand from deeper forecast cuts, in the face of weak freight fundamentals, has been a solid industry-wide start to ‘order season.’ The last trimester of the year is the period in which the OEMs usually open their out-year order books, leading to a period of outsized orders that typically extends into March.”
ACT Research believes that “it’s different this time” factors are at work in 2024, and those factors will help support Class 8 demand around a fundamentally weak US and Canadian tractor markets. Those factors include ongoing pent-up vocational truck demand, strong tractor demand in Mexico, a healthy LTL market, and supply chain integrity.
The N.A. CV OUTLOOK reports on the trucking industry forecast, providing a status of commercial vehicle demand, tactical and strategic market analysis and forecasts ranging out five years. The report’s objective is to give OEMs, suppliers, investors, and other interested market participants the information they need to make informed decisions in what is traditionally a deeply cyclical market. The report provides a complete overview of the North American markets, touching on relevant demand drivers starting with forward-looking activity metrics, orders and backlogs. Information included in this report covers build and retail sales forecasts and current market conditions for medium- and heavy-duty trucks/tractors, and trailers, North American macroeconomics by country, freight and carrier market performance, used equipment valuation trends, and regulatory environment analysis and impacts.
ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.
