New economic forecasts suggest the US economy is heating up. IHS Markit, the parent company of JOC.com, expects US real gross domestic product (GDP) to rise 6.2 percent in 2021, a 0.5 percentage-point upgrade from the company’s expectations for the US economy a month ago. US imports from Asia have risen by double digit percentages in every month since August 2020.
Actual truck tonnage hauled by for-hire carriers jumped 8.9 percent in March following a 7.9 percent decline in February, according to non-seasonally adjusted data from the American Trucking Associations. That helped propel truckload spot rates that had dipped slightly in February back to their late 2020 highs and then to new heights in April.
“The spot market is at a 41-year high-water mark. We’re at eight months of maximum pricing pressure in the trucking market,” Brent Hutto, chief relationship officer at Truckstop.com, said in an interview last week. “The expectation that we’ll see a shift from consumers purchasing goods to services (post-COVID-19 vaccination) is not enough to affect those rates.”
That expectation has not been proved yet. US Census Bureau estimates of US retail and food services sales were up 9.8 percent in March from February. “We don’t see any change until at least the fourth quarter, if that at all,” Hutto said.
Total US retail sales in the first quarter were up 14.3 percent from the first quarter of 2020, the Census Bureau said in its April 15 report. That increase came despite a 1 percent drop in consumer spending in February, the most storm-wracked month of the winter, a decline the US Bureau of Economic Analysis attributed mainly to fewer people receiving government social benefits that month.
The second round of stimulus, or economic impact payments, a maximum of $600 per individual, were distributed mainly in January. Legislation for the third and current round of payments, a maximum of $1,400 per individual, was signed into law by President Joe Biden March 11.
For Truckstop.com, daily load volumes of 400,000 to 500,000 shipments used to be considered normal, Hutto said. “Last week we had 1.63 million loads in one 24-hour period,” he said. “It averaged 1.4 million loads all week. Those are unheard of numbers.” Historic low inventories combined with high retail demand and a manufacturing recovery are straining capacity across all modes of freight transportation.
Source: Journal of Commerce