Truck Demand Roars To Start 2022

Mar 22, 2022 - 3 years ago

Demand for commercial trucks began in 2022 as 2021 ended – with a very good outlook for economic activity and by extension, freight, said Kenny Vieth, president and senior analyst for America’s Commercial Transportation Research Co. (ACT).

“The challenges for the industry at the start of 2022 are not dissimilar from those of a year-ago: supply-chain and labor constraints. We began talking about ‘chips’ at the start of 2021 and are still talking about them today. If there is a silver lining, the world is a year closer to the capacity additions that record levels of investment in those industries promise; there was a lot of capacity in the pipeline prior to the globe’s demand for goods outstripping silicon capacity into late 2020.”

Vieth continued, “Some moderation is expected in the rate of consumption of goods, after the pandemic surge, but key medium- and heavy-duty indicators remain intact. Freight rates ended 2021 at record levels. Carrier profitability has been rising with rates, so truckers are expected to have considerable free cash to spend on equipment in 2022. Additionally, chip shortages are creating pent-up demand across manufacturing segments, and consumer balance sheets are well positioned. Moreover, container ship backlogs remain long, business inventories relative to sales continue at decade lows, and surging used CV equipment valuations underscore how badly carriers are looking to lock-in capacity.”

Source: CTA