Commercial vehicle supply constraints, inflationary ramifications remain front-and-center

According to ACT Research’s recently-released Transportation Digest, the front-and-center concerns of the commercial vehicle industry at the moment are supply chain constraints, as well as the inflationary ramifications that flow from them. The report, which combines proprietary ACT data and analysis from a wide variety of sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets. This monthly report is designed as a quick look at transportation insights for use by fleet and trucking executives, 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. macroeconomy.

“In addition to the front-and-center supply-chain constraints, ACT also remains focused on key industry demand drivers,” said Kenny Vieth, ACT’s president and senior analyst. “The Cass Shipments Index has been on an upward track for almost a year and a half, which is no surprise, given the shift in consumer spending from services to goods during the pandemic.” Vieth explained further, “The nationwide focus on the supply-chain in the business press and the general media is unprecedented. And most of the links in supply-chain nodes from ports to factories to distribution centers to retailers and households are trucks and trailers.”

Vieth continued by explaining some of those demand-side factors.

“Spot freight rates for dry vans, flatbeds, and reefers reached highs in September. Higher diesel prices enhance the value proposition of today’s fuel-efficient new trucks, as fuel savings translate into bigger ROI numbers – especially for long-distance hauls,” Veith said.

Regarding drivers, he noted, “The driver shortage is a perennial issue for fleets and operators. Current ultra-tight labor market conditions have fleets competing fiercely for drivers. Offering a new truck, spec’d with state-of-the-art technology for driver safety, ease, and comfort, is a factor that helps driver recruitment and retention.”

Vieth concluded by sharing some thoughts about ACT’s forecasts.

“Reviewing forecast risks, the two most visible and worrisome unknowns in the near term are ongoing supply challenges for OEMs and suppliers impacting industry production, and the threat posed by COVID, especially if holiday gatherings are a catalyst for another wave,” he said. “We also note rising risks in China, from the financial risks of over-leveraged real estate, to rolling power outages, to geopolitical issues like environmental policy and increasing tensions with Taiwan.”