Carrier profitability in the U.S. is expected to reach record levels this year, as the freight-generating sectors of the economy are the strongest, according to the Commercial Vehicle Dealer Digest from ACT Research.
However, the report also raised concerns about the supply chain and how disruptions may affect commercial vehicle production.
“The supply chain’s ability to respond to demand will be the key determinant of Class 8 and van trailer production in 2021,” said Kenny Vieth, ACT’s president and senior analyst. “The silicon chip shortage that came to the world’s attention in early January appears to be the greatest risk to production in the near-term. According to reports, the supply situation is unlikely to be rectified before mid-year, so there are risks that this situation lingers into Q3.”
Vieth elaborated, “Prior to the chip shortage dominating the conversation, there was concern about a Mexican government directive ordering oxygen producers to give medical O2 demand precedence over industrial supplies. As much steel component production occurs south of the border, this was a foundational concern in terms of commercial vehicle output risk.”
He also noted concerns about steel availability and staffing, saying, “According to ACT’s channel checks, locking in steel supplies continues to happen, but finding stocks has become increasingly challenging. The reengagement of the global economy has created significant constraints on steel supply and could be a limiting factor as the supply chain attempts to build more trucks and trailers. And on the employment side of production, keeping staffed and growing staffing in a pandemic is no easy feat.”
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