COLUMBUS, Ind. – Oversupply of equipment is still a key factor at work in the weak outlook for heavy commercial vehicles in the coming two years, according to ACT Research. The others are demand and timing.
“While some, like the oversupply of equipment, have been on the radar for a long time, others, like the growing weakness in manufacturing and the broader economy, have come on slowly and inexorably over several months,” ACT said in its monthly publication Commercial Vehicle Dealer Digest.
The report paints a comprehensive picture of trends impacting transportation and commercial vehicle markets.
“The speed at which the economy is progressing, or not in the case of the manufacturing sector, is insufficient to absorb the capacity overhang that was built in 2019,” said Kenny Vieth, ACT’s president and senior analyst.
“If railroad and port activity are any indication, the freight slowdown is accelerating into year’s end and is as broad-based as it is disconcerting.”
ACT estimates that truckers purchased around 4ppts to 5ppts of capacity above the economically prescribed rate in 2019, leaving the industry awash in excess equipment, most of which was added by private fleets.
ACT Research is a publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts for the North America and China markets.