Presentations from a wide variety of speakers at the ACT Research Co. semi-annual commercial vehicle conference Thursday, June 11, highlighted the difficult issues facing both the trucking and commercial vehicle industries across the globe. In this 40th such conference hosted by the Columbus, Ind.-based firm, speakers included leaders from the American Trucking Associations, the Federal Reserve Bank of Chicago, TransCore, Eaton Corp., Milan Express, Arrow Truck Sales, Schneider National, J.D. Power & Associates and ACT Research.
Key observations and takeaway points from the conference included:
The U.S. economy continues to operate in negative territory, but the slope of the decline is moderating. The possibility exists for the economy to move into positive territory, albeit below-trend growth, by the fourth quarter. Above-trend economic growth does not appear to be likely before late 2010;
Freight generators, like new housing starts and automotive build, are needed to reverse and rejuvenate the freight situation. There was no consensus that these industries have reached bottom, but like the economy, the rate of decline has moderated;
Without a more vigorous economic rebound, freight growth will continue to be compromised. This translates into continuing excess hauling capacity — too many trucks and trailers for too little freight — which is acting like a brake on new and used equipment demand;
Excess hauling capacity is allowing shippers to be more aggressive in freight rate negotiations and using spot freight as a lever to reduce the cost of transportation further;
Tight credit availability continues to be a drag on used truck sales, while banks with outstanding equipment loans are opting for workouts with new terms rather than repossessing equipment; and
New equipment demand is being hampered by an increasing gap between stable to rising new equipment prices and dramatically declining used tractor and trailer prices. As a result, the North American truck and trailer fleets are aging to levels not seen previously or thought to be sustainable.
The conference draws executives from commercial vehicle manufacturers and suppliers, the transportation industry and capital market investment analysts. “Given the state of the economy, attendance at the conference was excellent,” says Ken Vieth, ACT senior partner and general manager. “The interaction between our guest speakers and participants always facilitates a healthy exchange of thoughts and information.” ACT’s next seminar will be held Oct. 28 in Indianapolis.
ACT is a publisher of commercial vehicle industry data, market analysis and forecasting services for the North American market. ACT says its CV services are used by all major North American truck and trailer manufacturers and their suppliers, as well as the banking and investment community. For more information, go to www.actresearch.net.
