June Commentaries

 

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Restarting the Economy: What are the ‘Known Unknowns’
FTR | Transportation Intelligence™

As the U.S. and global economies start the process of restarting, variables can be identified (are known) but the outcome of the variables are still unknown. This State of Freight Insights report outlines the near and long-term factors that are guiding our research and analysis during the economic restart and recovery.

 

 

Canada: The Economy Reopens and a Long Cool Road Back Beckons
By Steve Graham, FTR Partner

The Canadian economy is reopening after suffering a sharp decline because of the COVID-19 virus. Economic damage from the virus was steep. This article provides an overview of the situation and the pathway back to pre-pandemic levels. 

 

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Known Unknowns & Ask the Expert Q&A
FTR Webinar Replay

There are many risk factors and variables we know will affect the economy, but the impact and magnitude of these are still not known. These ‘known unknowns’ are variables the FTR team is closely monitoring. This Ask the Expert webinar replay addresses the uncertainty that transportation professionals are facing and discusses the various factors involved in restarting the economy. 

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Conditions Indices & Equipment Orders

FTR’s April Trucking Conditions Index Lowest Ever Ahead of Expected Improvement

Trucking Conditions Index
FTR’s Trucking Conditions Index reading for April was the lowest ever at -28.66, reflecting the contraction due to the COVID-19 pandemic. The previous low was -16.08 in September 2008. The only significant positive factor for the TCI was the cost of fuel; demand, utilization, and rates were extremely negative.

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FTR’s Shippers Conditions Index for March at 19.7 Reflects Strong Favorable Market Conditions

FTR’s Shippers Conditions Index for March at 19.7, which more than doubled the level of February, reflects the most favorable market conditions ever. Operational challenges remain, but utilization, rates, and fuel costs all turned highly favorable due to COVID-related influences. FTR projects that increasingly favorable conditions for shippers will likely send this index significantly higher in Q2 as plunging capacity utilization causes rates to fall and fuel costs sink further.

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FTR Reports May Final Trailer Orders at 4,300 Units

FTR reports final net trailer orders for May improved over the dismal April activity, coming in at 4,300 Units. May orders were +1200% m/m but still substantially lagging last year with a -64% y/y comparison. New orders are still tepid, and cancellations were elevated for the third consecutive month. Trailer orders for the past twelve months now total 155,000 units.

All segments except flatbeds and specialty experienced m/m order increases. It appears that fleets were still reluctant to replace old trailers in the throes of the pandemic, which crashed the economy in March. Carriers continue to monitor the freight markets closely before committing to placing orders for 2020 deliveries.

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FTR Reports North American Class 8 Net Orders Remain Subdued in May at 6,600 Units

FTR reports preliminary North American Class 8 net orders for May remained subdued at 6,600 units. While up 61% from the dismal April activity, the May orders were down 37% y/y. Class 8 net orders for the last twelve months total 155,000 units.

Fleets remain reluctant to order trucks, as states extended restrictions due to COVID-19, creating additional economic turmoil. Orders are expected to continue to increase modestly, as economic activity resumes after many of the constraints are lifted. Freight volumes have picked up some after bottoming out in Mid-April. The recovery is expected to be slow and uneven. It has not started quite yet based on the weak Class 8 orders in May. June should be a better indicator, as more economic activity resumes.

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