With all 50 states relaxing COVID-19 shutdown orders to various extents, trucking shipments and rates are heading back up – but don’t expect a true recovery until 2021.
For the week of May 18-24, truckload markets continued to follow seasonal trends, and load-to-truck ratios on the DAT network continued to climb as a result, according to DAT Solutions. That put pressure on prices, which rose going into the long holiday weekend as more and more businesses reopen.
The number of posted loads actually dropped 16.5% during the week ending May 24, which includes the Friday, Saturday, and Sunday of Memorial Day weekend, but truck posts fell 29%. Shippers and brokers paid a premium to secure capacity ahead of the holiday, DAT said.
Look for 2021 rebound
ACT Research is predicting that the economy will transition from contraction to growth over the course of the third and fourth quarters. “Clearly the global economy does not have the luxury of waiting a year or two for a vaccine to be developed before the current solution itself becomes the greater risk,” said Kenny Vieth, ACT president and senior analyst. “Our forecast anticipates that the U.S. economy, as defined by GDP, will not return to its Q4’19 size until after 2021.”
It’s not easy to restart supply chains that were totally shut down due to the pandemic, Vieth said. “In the supply chains that support complex OEM-level assembly operations, from raw materials to finished goods, it is not just about opening one plant, but opening thousands of plants simultaneously, making tens of thousands of parts that go into those assemblies in an orchestrated fashion, all with new layers of safety and testing protocols in place.”
On top of that, he said, getting buyers to market is another challenge “when the economy has so recently cratered and going outside poses an existential risk.”
However, Vieth said, because the pre-COVID economy was “structurally sound… with strong Federal Reserve and Congressional support, and rising pent-up demand, there is a case to be made that the economy will respond strongly into 2021.”