The ongoing worldwide outbreak of the COVID-19 strain of the coronavirus has caused updates to ACT Research‘s recently released March installment of the ACT Freight Forecast, U.S. Rate and Volume Outlook report.
“There’s not much freight in a basketball game, and the outlook for capacity is tighter, as COVID-19 and financial volatility will likely further lower new equipment purchasing,” said Tim Denoyer, ACT Research’s vice president and senior analyst. “Freight could be less affected than the overall economy in a service-side recession, the risk of which has risen. At this point, we expect a sharp but short decline in economic activity, but the situation continues to evolve quickly. With a likely inventory restock in the second half, among several tailwinds, there is a case for recovery in freight. And with capacity coming, we think the outlook for improving truckload rates is fairly resilient to COVID-19.”
On the data front, the most recent weekly Class 1 rail data suggests COVID-19 effects washed onto North American shores in the last week of February, ACT says. In the week ending February 29, NA Class 1 intermodal volumes fell 12% year-over-year, 7 points below an already weak 2020 YTD trend of -5% through eight weeks. Predictably, because of proximity to China, the impact started on the U.S. western railroads, BNSF and UP, ACT noted. With longer steaming times, ACT says it expects the eastern railroads to experience lower volumes shortly.
