Although efforts to curtail the spread of the COVID-19 pandemic have already slowed the flow of freight across wide swaths of the U.S. corporate and cultural landscape, the true measure of the economic impact of the disease won’t be visible until businesses release their March and April statistics, a new report says.
In recent days, sectors ranging from restaurants and schools to office buildings and amusement parks have shut their doors and asked students and non-essential employees to telecommute or work from home. Those policies have made many visible impacts, such as empty highways and subway trains that would usually be packed with commuters during rush hour. But their impact on less obvious variables like Class 8 truck sales are not yet clear, according to a freight sector report by ACT Research Co.
“From a current data perspective, regardless of source, February marks the last month of essentially COVID-free datapoints,” Kenny Vieth, ACT Research’s president and senior analyst, said in a release.
The first confirmed case of COVID-19 was detected in Washington state on Jan. 21 and as long ago as February 10, industry groups like the National Retail Federation (NRF) were warning that coronavirus closures in Asia and Europe would likely slow sales revenues. But most U.S. policies to slow the spread of the disease weren’t applied until a month later, such as the state of Florida declaring a public health emergency on March 1 and President Trump’s March 11 move to suspend most passenger traffic between the U.S. and Europe.
That lag between the virus’ original spread and the rise of widespread closures will likely delay the economic hit to logistics providers and other parts of the economy, the ACT report found. “While some portion of the U.S. population was working on the assumption that the virus was ‘fake news,’ the rest were still getting their heads around concepts like ‘social separation’ and ‘exponential.’ Decrements in the March data releases will be nothing to compare to the April data we will see in May,” Veith said.
In the meantime, the market for heavy trucks is already weak, as shown as historically high ratios between unsold inventory and sales of Class 8 trucks, the ACT report found. Speaking about the heavy-duty market, Vieth said, “The Class 8 market in February continued to operate in line with pre-pandemic expectations: massive 2019 demand for Class 8 tractors in a period of falling industrial activity created significant overcapacity that, in turn, caused carrier profitability to fall sharply through the course of last year, setting the stage for weak demand in 2020.”
According to ACT Research’s (ACT) latest State of the Industry: NA Classes 5-8 Report, Class 8 inventory-to-sales ratio, seasonally adjusted, hit 3.5 months in February...https://t.co/LSzW3Nf8oj#truck #semitruck #trucking #transportation pic.twitter.com/kRCPexsRCv— ACT Research (@actresearch) March 18, 2020