Shippers market conditions were further challenged with strong freight volumes and fuel costs continuing to rise. The outlook for 2021 is better but still resulting in negative SCI readings through the year. “In the intermodal arena we are seeing that ports and other stakeholders were not able to use the holidays to catch up on congestion issues that have plagued some markets,” Starks added. “However, intermodal loadings are still well above prior year and the typical seasonal lull in Q1 may not appear this year.”
Starks stated that manufacturers in China are not expected to take the normal two-week shutdown for Chinese New Year activities, making the market expect higher import volumes.
“With the holiday not occurring until mid-February, the market typically would expect high import volumes in late February followed by a noted slowdown in activity for a few more weeks,” Starks explained. “This could make it more difficult for the ports to get ahead of the vessel delays and port congestion until mid-year.”
Freight growth remains vibrant and fleets are rushing to add capacity as fast as possible. OEMs and suppliers are trying to keep pace with the surging demand. Fleets continue to place orders out to the end of the year to acquire trucks as they become available.
“Currently there are shortages of raw materials and component parts, which will result in supply being unable to meet the demand of Class 8 trucks in the short-term,” commented Don Ake, vice president of commercial vehicles for FTR. “Class 8 suppliers are working diligently to ramp up production but are hindered by the pandemic and material shortages. In addition, imported parts deliveries are being delayed up to two weeks at the ports.”
According to FTR, January order activity was -18% m/m and +144% y/y. Orders for the previous twelve months now total 308,000.
