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Record carrier profits driving CV backlogs: ACT Research

March 11, 2021
Supply chain challenges become 'key determinant' to truck, trailer production in 2021, Vieth says

In the release of its latest Commercial Vehicle Dealer Digest, ACT Research reported that the freight-generating sectors of the economy are the strongest sectors at the start of 2021, with carrier profitability expected to rise to record levels this year, and backlogs filling rapidly. That said, ACT Research continues to note supply-chain concerns.

“The supply chain’s ability to respond to demand will be the key determinant of Class 8 and van trailer production in 2021,” said Kenny Vieth, ACT president and senior analyst. “The silicon chip shortage that came to the world’s attention in early January appears to be the greatest risk to production in the near-term. According to reports, the supply situation is unlikely to be rectified before mid-year, so there are risks that this situation lingers into Q3.”

Vieth also noted that, prior to the chip shortage issue, there was concern about a Mexican government directive ordering oxygen producers to give medical O2 demand precedence over industrial supplies.

“As much steel component production occurs south of the border, this was a foundational concern in terms of commercial vehicle output risk, Vieth said, also noting concerns about steel availability and staffing. “According to ACT’s channel checks, locking in steel supplies continues to happen, but finding stocks has become increasingly challenging. The reengagement of the global economy has created significant constraints on steel supply and could be a limiting factor as the supply chain attempts to build more trucks and trailers.

“And on the employment side of production, keeping staffed and growing staffing in a pandemic is no easy feat.”

The report, which combines ACT’s proprietary data analysis from a wide variety of industry sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets. This monthly report includes a relevant but high-level forecast summary, complete with transportation insights for use by commercial vehicle dealer executives, reviewing top-level considerations such as for-hire indices, freight, heavy and medium duty segments, the total US trailer market, used truck sales information, and a review of the US macro economy. 

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