More than a year ago, a once-in-a-century public health event covered the globe in a fog of uncertainty. There was no telling what the future would bring, but a considerable human and economic toll was all but certain.
Yet what a difference a year makes! The U.S. economy maintains momentum amidst a decline in cases as vaccinations increase, public spaces reopen, and warmer weather arrives. Another round of stimulus spending is being rolled out as an ambitious infrastructure program waits on the horizon.
There’s a lot to be optimistic about. But so many questions remain for the future of freight. When will these elevated freight volumes cool off? Will truckload capacity ever catch up? And how much longer will this inflationary rate environment last?
Several analysts expect this heightened truckload rate environment to crest in Q3 of 2021. Yet how you feel about the future likely depends on whether you believe the pandemic-influenced changes in consumer behavior are a trend or a structural realignment in preferences. It also depends on the long-term impacts the coronavirus pandemic has on the professional driver workforce. The coming quarter will not only tell us a lot about freight volumes and truckload capacity, but also when freight markets will turn.
Our Q2 2021 Economic Forecast looks at a slew of economic indicators such as GDP, unemployment, Class 8 truck orders, and the Logistics’ Managers Index to discuss four key themes that will shape freight markets over the next quarter (and beyond). As with our prior forecast, we still expect the inflationary rate environment to persist for most of 2021, even beyond a slight easing in freight volumes late 3rd quarter.
It all comes down to whether consumer spending and business purchases continue to thin out inventory levels. On the other side of the coin, the depth and breadth of the driver shortage will be a key determinant as well, particularly as government spending influences the labor market.
While it’s hard to say when this pandemic will finally come to a close, don’t lose sight of the fact that the end of this harrowing episode draws closer each day. But, until then, it’s best to remain vigilant and stay informed. So, take a look!