- Dry van activity has rebounded off an economic bottom but is stuck at low levels "that do not yet indicate a significant return to normal industrial or consumer activity," according to FTR. Flatbed has not decelerated like dry van, but levels are low, FTR officials said during a webinar on Thursday. Intermodal has also stabilized at a low level, the research firm reported in its midyear economic outlook and update.
- Refrigerated trucking levels, based on origin volumes, are above normal only on the West Coast for the week ending May 11, FTR found. According to the FTR COVID-19 Truck Recovery Index, which uses data from Truckstop.com, refrigerated origin volume is 30% or more above normal for California, Oregon, Washington, Montana, Wyoming, Utah and Idaho. But Avery Vise, FTR vice president of trucking, said reefer business is uneven for other parts of the nation that produce food. The Great Plains states, Texas, Iowa, Indiana and Illinois are seeing at least 30% less reefer volume.
- Vise said the firm's index shows an overall "bottoming out" of market conditions, which occurred in mid-April, but no sustained acceleration toward trucking recovery.
The nature of the economic recovery isn't just going to be uneven by freight mode, but uneven geographically, Vise said during the webinar. Food and other refrigerated goods are still kings in the recovery, as consumers eat at home more often. Industrial freight, key to dry van health, remains down.
Other researchers have noted the uneven effect the coronavirus, the related shutdowns and the recovery are having on states. Inrix found the decline in freight traffic caused by the COVID-19 crisis has been sharpest in Michigan, with a 37% drop, according to Bob Pishue, Inrix transportation analyst. Freight, as measured by vehicle miles traveled, dropped 13% nationwide, with the West Coast and the Northeast regions the softest hit.
"It's a rather uneven and certainly not a highly accelerated recovery," said Vise, who noted many states have yet to fully reopen.
The overall recovery will require heavy lifting, according to Bill Witte, FTR economist. Witte told webinar listeners the COVID-19 crisis wiped out all new U.S. jobs created since the bottom point of the Great Recession of 2007-2009. The unemployment rate hit a bottom of 3.5% in early 2020, jumping to 14.7% in April as coronavirus took hold. About 20.5 million jobs were lost in April.
"Looking ahead is difficult," said Witte. "Even looking exactly where we are is a little bit difficult."
Witte warned economic indicators and statistics will get worse. Witte said the Q2 GDP will bottom out at negative 22%, calling it the "high end" of projections he has seen. Overall, the economy won't get back to normal right away, Witte said.
"I think that we are going to have a permanent loss in the level of activity in our economy going forward," said Witte. "It's going to continue not just through 2021, but more or less indefinitely."
That was not far off from what FTR said at its April 17 briefing. FTR reported then its Trucking Conditions Index (TCI) will likely stay negative until 2021.
As for rates, other researchers agree they have hit bottom. ACT Research reported on Thursday the "bottoming process" has begun for the trucking cycle. Truckload spot rates have fallen 20% since March, ACT Research found.
"Massive economic pressure will weigh on freight volumes for a long time, excess capacity is still material, and the mid-term outlook remains very uncertain," wrote Tim Denoyer, ACT Research's vice president and senior analyst. "We doubt this will mark the bottom, but with new dynamics of significantly lower supply and incrementally improving demand, we think rates are close to bottom with at least seasonal improvement likely in the near-term."