ECONOMIC WATCH: Rates at risk as unemployed drivers return

by Today's Trucking

COLUMBUS, Ind. – The U.S. freight market has stabilized, but excess capacity could put a rate rebound at risk, according to ACT Research.

The industry analyst published the June installment of its Freight Forecast: U.S. Rate and Volume Outlook, warning that capacity can come back online quickly due to the number of unemployed qualified drivers.

“Freight market stabilization progressed this month with a strong rebound in spot rates. The number of trucks parked in April was likely into the six-figure range, and the increased unemployment benefits incentivized drivers not to return to work in the near-term,” said Tim Denoyer, ACT’s vice-president and senior analyst.

(Source: ACT Research)

“However, capacity tightness because of too few drivers is much easier to solve than tightness because of too few trucks. With record numbers of qualified drivers looking for work, we expect the current imbalance to be resolved relatively quickly, which will press rates lower as seasonal strength fades in the coming months.

“Thereafter, we see the Class 8 tractor capacity balance tightening for the first time in two years, as this latent capacity is absorbed. As a result of the equipment supply shock from the pandemic, our confidence in a significant freight rate cycle on the longer-term horizon is reinforced.”

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