- As states and localities ease shopping restrictions, and as the Fourth of July approaches, demand for dry van capacity has stimulated the spot truckload market for the week ending June 22, DAT reported on Wednesday. Spot van rates and refrigerated rates are rising, according to DAT, which operates the largest load board. And in perhaps a telling sign of a coming capacity crunch, available trucks on DAT's network fell 3.5% from the week earlier.
- ACT Research said May had the largest month-over-month increase in for-hire freight volume. In April, the organization reported the worst reading of the same metric in its history of measuring it. Inventories are rebuilding, following a draw-down in March and April, and it is "a much more stable volume environment," said Tim Denoyer, ACT VP and senior analyst, in a Tuesday news release.
- Also on Tuesday, the American Trucking Associations (ATA) reported its seasonally adjusted for-hire tonnage index contracted 1% in May from April, after falling 10.3% in April from March. Compared to May 2019, the tonnage index contracted 9.6%, "the largest year-over-year decline since 2009 during the depths of the Great Recession, although the index is not falling quite as much as during that economic downturn," said Bob Costello, ATA chief economist.
The improved readings seem to be fueling growing confidence in the industry, despite the fact the economy is in a recession, and despite concern that the health and full recovery of the industry are still in question. Some noted trucking had a unique resistance to the problems associated with the COVID-19 pandemic, and that the industry did not plummet as much as others.
"While tonnage fell in May, even though other economic indicators like retail sales and housing starts rose, I'm not overly concerned,” Costello said in his news release. "First, while down over 10% sequentially in April, truck tonnage did not fall as much as other economic indicators that month. This means that any rebound is tougher since tonnage didn't fall substantially to begin with. Second, there are indications that freight continues to improve as more and more states and localities lift lockdown restrictions."
Freight rates and freight volumes have "effectively [recovered] all the ground lost in April," Denoyer said, although rates remain in negative territory, as measured by ACT Research's index. "The trends of a strong rebound in freight volumes as a capacity-tightening cycle has begun shows a bottoming process is well under way."
Costello's glasses were not too rose-colored. He said the overall economy could take a year to fully recover, "assuming the pandemic does not spike again."
"As retail sales improve and housing starts recover, that will help trucking," Costello said. "The risk for trucking is that the virus surges again and places start to shut back down again."
But for now, truck traffic appears to be returning to normal, according to a June blog post by Samsara.
"U.S. states have returned to above 95% of pre-COVID-19 commercial driving activity, both in terms of miles driven and vehicles on the road. States that had limited or no shelter-in-place orders are now seeing a 7% average increase in both areas," the company said.
Denoyer in his release said signs of the market tightening are not to be confused with a full-blown recovery. The pandemic, he said, was and is considerable.
"With sidelined drivers likely coming back, and lenders extending loans, it may be a while before the market really tightens," Denoyer said. "In short, given the magnitude of the economic shock from the pandemic, the road back might be a long one."