COVID-19 only one of the risks impacting commercial vehicle market, says ACT

COLUMBUS, Ind. — In two of its latest reports, experts at ACT Research note that the COVID-19 pandemic is not the only issue that is impacting the North American commercial vehicle market.

According to ACT Research’s recently released Transportation Digest, COVID-19 is just one of several factors that could impact commercial vehicle forecasts now and in the foreseeable future.

The report, which combines proprietary ACT data and analysis from a variety of sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets. The monthly report offers a quick look at transportation insights, reviewing top-level considerations such as for-hire indices, freight, heavy- and medium-duty segments, the U.S. trailer market, used truck sales information and an overview of the U.S. macro economy.

“The general trend of the COVID contagion curve through July was rising, but in early August newly reported cases were dropping, according to Johns Hopkins,” said Steve Tam, vice president of ACT.

“In general, we are seeing favorable COVID trends in international economies, as well,” he continued. “That said, until we have a permanent cure for, or way to control, the coronavirus outbreak, that will remain the biggest risk to the commercial vehicle forecast in the short- and long-term.”

Tam also noted that while it could be easy to overlook other risks because of the global emphasis on COVID-19, it is vital that all threats to the commercial vehicle market be considered.

“One obvious threat is the increasingly tense bilateral relationship of the U.S. and China, and another is the outcome of November’s election,” he said.

On the upside, however, he noted, “We’re seeing promising levels of activity in key goods-producing and goods-distribution industries that drive motor freight and logistics, such as manufacturing, construction, and wholesale/retail trade, with e-commerce carrying the load in distribution.”

ACT also recently released its Commercial Vehicle Dealer Digest, which reported that freight markets continue to be less impacted by the pandemic than the economy at large, and that a vaccine against COVID-19 is seen as the key to unlocking a more broad-based recovery, as the simplest human interactions will no longer have to be weighed and justified.

“Even as the economy struggles to regain its footing post-COVID and pre-vaccine, freight markets have been somewhat less impacted,” Tam said.

“Most freight is related to society’s most basic needs: food, shelter, clothes, transportation,” he continued. “A positive for freight, in the current environment, is that much of the discretionary spending that was ‘experience’ focused, like travel, attending events, and dining in restaurants, has been replaced by goods-based purchases that generate a greater amount of freight per dollar.”

When asked how the commercial vehicle industry is faring, Tam commented that parked capacity is one consideration he sees as weighing on the market.

“But even with that, a case can be made for a steady, if modest, Class 8 market rebound from here,” he stated.

“Based on continued increases in Classes 5-7 build, the OEMs appear to be betting on business and consumer resilience, while trailer forecasts are improving at the margin with accelerated trends in e-commerce boosting LTL demand and a new generation of home cooking driving some gains in multitemp refrigerated vans,” he concluded.

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