Business

COLUMBUS, Ind. — More people and politicians are taking the threat of COVID-19 more seriously is resulting in a “choppy” economic path forward, according to the Commercial Vehicle Dealer Digest released by ACT Research July 27. The monthly report, which combines ACT’s proprietary data analysis from a variety of industry sources, paints a comprehensive picture of trends that impact the transportation and commercial-vehicle markets. The report includes a high-level forecast summary, complete with transportation insights, and reviews top-level considerations such as for-hire indices, freight, heavy- and medium-duty truck segments, the total U.S. trailer market, used truck sales information and a review of the U.S. macro economy. “As the virus flared in the weeks following Memorial Day, and exacerbated by the Fourth of July, segments of the economy will be turned off and back on as the authorities work to contain the widening spread of the disease,” said Kenny Vieth, president and senior analyst of ACT. “While we do not believe state-level closures are likely from here, we note that the raging case counts in major Sunbelt states raise the risk of major supply-chain disruptions, if any of those states are shuttered for several weeks.” When asked how the commercial-vehicle industry is faring during the global pandemic, Vieth said, “Even as the economy struggles to regain its footing post-COVID and pre-vaccine, freight markets should be somewhat less impacted. While we can choose not to go to restaurants, not eating is not an option. To that end, we are reminded of Alan Greenspan’s research that freight volumes on a per capita basis change very little over time. Most freight is related to society’s most basic needs: food, shelter, clothes, transportation.” Vieth noted that OEMS and, as a result, the supply base, are “pushing hard” to restore material and assembly flows, adding that underlying economics are faring better than initially estimated. “Additionally, spot freight rates, sitting at the intersection of equipment supply and freight demand, are the leading indicator of heavy commercial vehicle demand cycles, and the sustained rally in spot rates is one consideration leading us to make the case for a steady Class 8 market into the end of 2020,” he concluded.

VAN BUREN, Ark. — USA Truck Inc. (USAT) reported a consolidated operated revenue of $123.7 million for the second quarter of 2020 compared to $133.6 million for the second quarter of 2019, according to a report released by the company July 27. The company’s base revenue, which excludes fuel surcharge revenue, was $113.2 million compared to $116.7 million for the 2019 period. A net loss of $0.9 million, or 11 cents per diluted share for the second quarter of 2020 and an adjusted net loss of $0.5 million, or 6 cents per diluted share, was reported. During the same quarter in 2019, USA Truck reported a net income of $0.0 million, or 0 cents per diluted share, and an adjusted net income of $0.3 million, or 3 cents per diluted share. The company’s consolidated operating ratio for the second quarter of 2020 was 99.2%, compared to 98.5% in the comparable 2019 quarter. “The second quarter of 2020 was unlike any quarter we have seen in transportation, producing unprecedented day-to-day and week-to-week swings in freight and pricing due to the COVID-19 pandemic,” noted James Reed, president and CEO of USAT. “Our diversified customer base — we classify approximately 80% of our customers as essential/quasi-essential — kept our asset-based freight moving consistently through the quarter, although our nonessential customers, which are critical to our network despite being a smaller relative percentage of the freight basket, have yet to make a full recovery,” he continued. “We supplemented this shortfall with lower-priced spot freight, and consequently saw an overall degradation in our base revenue per available tractor per week. Despite the challenges, the trucking segment improved its adjusted operating ratio(a) by 370 basis points sequentially.” For the second quarter of 2020, the company’s trucking operating revenue (before intersegment eliminations) decreased $7.8 million, or 8.1%, to $88.6 million, compared to the second quarter of 2019. Trucking operating income of $1.2 million for the 2020 period reflected an operating ratio of 98.7%, compared to operating income of $0.8 million and an operating ratio of 99.1% for the second quarter of 2019. This represents a year-over-year increase of $0.3 million in operating income and a 40 basis point improvement in operating ratio. Trucking adjusted operating income was $1.7 million for the 2020 period, reflecting an adjusted operating ratio of 97.8%, compared to adjusted operating income of $1.2 million and an adjusted operating ratio of 98.6% for the comparable 2019 period. This represents a year-over-year increase of $0.6 million in adjusted operating income and an 80 basis point improvement in adjusted operating ratio. USAT’s trucking operations delivered the following results during the second quarter of 2020: Base revenue per available tractor per week decreased $347 per week, or 10.4%, compared to the second quarter of 2019, and $220 per week, or 6.8% sequentially, primarily due to a decrease in base revenue per loaded mile. Base revenue per loaded mile decreased 12.3 cents, or 5.7% year over year and 6.8 cents, or 3.3%, sequentially. This change was the result of continued decreased rate realizations. Loaded miles per available tractor per week decreased 76 miles, or 4.9%, compared to the second quarter of 2019, and by 57 miles per tractor, or 3.7% sequentially. Deadhead percentage for second quarter 2020 increased 40 basis points year over year but improved 10 basis points sequentially. The average seated tractor count for the second quarter of 2020 was 1,943, which represented an increase of 6.9% over the second quarter 2019 average of 1,817 and a 3.8% increase over the sequential average of 1,871. Average unseated tractor percentage for second quarter 2020 was 5.8%, an increase from 5.2% for both the second quarter of 2019 and sequentially. “USAT logistics’ efficiency continued to improve as we saw a 15.7% increase year over year in load count, continuing the recent trend of efficiency gains and throughput capacity,” Reed said. “But the broader environment proved challenging as spot prices alternated between near all-time lows and near all-time highs all within the same quarter. We expect this segment will continue to track ahead of the market in coming quarters.” The company’s logistics segment showed an operating revenue (before intersegment eliminations) of $38.7 million for the second quarter of 2020, a decrease of $0.8 million, or 2.1% year over year. Both operating loss and adjusted operating loss were $0.2 million for the second quarter of 2020, reflecting an operating ratio of 100.5% and an adjusted operating ratio of 100.5%, compared to operating income and adjusted operating income of $1.1 million and an operating ratio of 97.1% and an adjusted operating ratio of 96.8% for the comparable 2019 period. This change represented a decrease of $1.3 million year over year in operating income and adjusted operating income, and a degradation of 340 basis points in operating ratio and 370 basis points in adjusted operating ratio(a) compared to the second quarter of 2019. USAT’s logistics operations delivered the following results during the second quarter: Gross margin dollars decreased 27.9%, or $1.8 million year over year, to $4.7 million for the second quarter 2020, but increased 18.7%, or $0.7 million, sequentially. Gross margin percentage for the second quarter of 2020 decreased 430 basis points to 12.2% compared to 16.5% in the second quarter of 2019, but increased 110 basis points sequentially from 11.1%. Revenue per load decreased 15.4%, or $212 per load year over year, and decreased 11.8%, or $155 per load, sequentially. Load count increased by approximately 4,500 loads, or 15.7%, year over year and by 6,100 loads, or 22.4%, sequentially. “Our organization is continuing to show progress in key initiatives of regionalization, technology, and cost control. Regionalization is starting to gain traction, as we anticipate the opening of a terminal in the Dallas, Texas, market by the end of third quarter,” Reed said, adding that he expects the Dallas terminal to lower USAT’s over-the-road maintenance costs and improve the company’s driver retention. “Additionally, we have entered into an agreement for delivery of an additional 189 new tractors that we expect to be completed during 2020. This transaction will reduce our average age of the fleet, improve maintenance costs further, and contribute to our cost reduction initiatives,” he said. “We believe we are well positioned as market capacity is tightening. We continue to focus on providing great service to our customers, improving utilization on our trucks, and increasing volumes through our USAT logistics segment.” As of June 30, USAT’s total debt and lease liabilities was $189.5 million, total debt and lease liabilities, net of cash (“net debt”), was $189.4 million, and total stockholders’ equity was $75.5 million. Net debt to adjusted EBITDAR for the trailing 12 months that ended June 30 was 4.1x. In addition, the company had approximately $38 million available to borrow under its credit facility as of June 30.

CHATTANOOGA, Tenn. — U.S. Xpress Enterprises Inc. reported overall improvements for the second quarter of 2020, according to a report released July 28. “I am very pleased with our second-quarter results, as we are beginning to see the tangible, financial benefits of our strategic initiatives focused on utilizing technology to improve our processes, accelerate the velocity of our business, improve our customers’ and drivers’ satisfaction, and lower our costs,” said Eric Fuller, the company’s president and CEO. “The approximate 500 basis points of sequential margin improvement we achieved exceeded normal seasonality,” he continued. “The successful launch of our digital fleet, ongoing success in reducing overhead costs, better safety performance and lower fuel costs more than offset a sequential decrease in revenue per mile in our over-the-road division as there continued to be excess tractor capacity relative to freight demand in the market for a majority of the quarter due in part to COVID-19.” The company’s operating revenue was $422.5 million, an increase of $8.6 million compared to the second quarter of 2019. The increase was primarily attributable to increased revenues in the company’s truckload division of $16.2 million, an increase of $6.6 million in brokerage revenue and decreased fuel surcharge revenues of $14.2 million. Excluding the impact of fuel surcharges, second-quarter revenue increased $22.8 million to $394.0 million, an increase of 6.1% as compared to the prior year quarter. Operating income for the second quarter of 2020 was $16.3 million, which compares favorably to the $8.8 million in the second quarter of 2019. Operating ratio for the second quarter of 2020 was 96.1% compared to 97.9% in the prior year quarter. Net income attributable to controlling interest for the second quarter of 2020 was $9.5 million compared to $2.7 million in the prior year quarter. Adjusted net income attributable to controlling interest for the second quarter of 2020 was $9.5 million, compared to $2.9 million in the 2019 quarter. Earnings per diluted share were $0.18 for the second quarter of 2020 and adjusted earnings per diluted share1 were $0.18. The company’s truckload segment achieved an operating ratio of 94.6% and an adjusted operating ratio of 94.1% for the second quarter of 2020, a 340 and 350 basis point improvement, respectively, compared to the operating ratio of 98% and the adjusted operating ratio of 97.6% achieved in the second quarter of 2019. This improvement was achieved despite a 3.2% decline in average revenue per mile as U.S. Xpress continued to execute on its digital initiatives while maintaining a focus on reducing fixed and variable costs. In the over-the-road division, the oversupply of tractors relative to market demand continued to pressure spot pricing lower compared to the 2019 quarter. Contract revenue per mile was down year over year by approximately 5%. Average revenue per tractor per week declined 1.8% compared to the second quarter of 2019. Average revenue per mile decreased 5.2% compared with the 2019 quarter. “The over-the-road division experienced substantial improvement in the second quarter driven by the conversion of an additional 300 of our lowest performing tractors into our digital fleet,” Fuller said. “This conversion helped drive our OTR utilization up by 3.5%, as compared to the first quarter of 2020, while contributing to a reduction in both our fixed and variable costs.” The company’s dedicated division’s average revenue per tractor per week increased $104 per tractor per week, or 2.6% compared to the second quarter of 2019 on relatively flat average revenue per mile and higher miles per tractor. According to the report, the fluctuations in volume in the general freight market and in specific industries related to COVID-19 have not negatively impacted the volumes of the company’s major dedicated accounts, which are concentrated in the discount retail and grocery market sectors. “Our dedicated division continued to perform very well in the second quarter having delivered its fifth consecutive quarter of record productivity. Average revenue per tractor per week expanded from the first quarter, to $4,122, while we grew the truck count in this division by 1.3%,” Fuller said. “I continue to be very pleased with our team’s execution and we remain focused on organically growing the Dedicated division given the stability that we believe this business provides through economic cycles.” The brokerage segment continues to provide additional selectivity for the company’s assets to optimize yield while at the same time offering more capacity solutions to customers. Brokerage-segment revenue increased to $46.0 million in the second quarter of 2020 compared to $39.5 million in the second quarter of 2019, primarily as a result of increased load count partially offset by decreased revenue per load. Brokerage operating loss was $4.2 million in the second quarter of 2020 as compared to operating income of $1.3 million in the year ago quarter. Management will continue to focus on improving margins in this segment over the next few quarters. At the end of this year’s second quarter, U.S. Xpress had $140.4 million of liquidity (defined as cash plus availability under the company’s revolving credit facility), an increase of approximately $45 million from the first quarter, $381.6 million of net debt (defined as long-term debt, including current maturities, less cash balances) and $240.2 million of total stockholders’ equity. The company expects its net capital expenditures to approximate $100 to $120 million for the full year of 2020, which includes an approximate $20 million transaction that carried over from the fourth quarter of 2019. Through June 30, 2020, net capital expenditures were $65.0 million including the carryover $20 million from 2019. The company’s baseline assumptions for the balance of 2020 include a general sequential economic recovery that may be volatile nationally or by region at times, a muted increase of capacity and a relatively benign cost inflation, which should allow for a more favorable rate environment over the next several quarters.

COLUMBUS, Ind. — As the COVID-19 pandemic continues to have a negative impact on the global economy, reports from ACT Research (ACT) for June show continued rebounds in the North American trucking industry after shutdowns in March, a “dismal” April and slight improvements in May. FOR-HIRE TRUCKING INDEX The latest release of ACT Research’s For-Hire Trucking Index, which includes data for June, shows continued, significant improvement in the diffusion index measures tracked. The volume index rose to 70.4 in June, up from 19.3 in April and 50.2 in May, with pricing and productivity at 65.2 and 69.9, respectively. Capacity remained stuck in neutral, hovering near the 50 mark. “The survey confirmed much of what we witnessed in rate data over the course of June, as the supply-demand balance tipped in truckers’ favor as the economy reopened,” said Kenny Vieth president and senior analyst for ACT Research. “While encouraging, we would note some transitory risks, one being the economic strength in May and June was heavily subsidized by Congress and the Federal Reserve.” ACT’s For-Hire Trucking Index is a monthly survey of for-hire trucking service providers. Responses are converted into diffusion indexes, where the neutral or flat activity level is 50. Vieth also credited June’s strong rates to parked trucks and laid-off driver capacity. “The strong rebound in freight volumes from April’s trough underscores the rapid move in freight rates, as the market moved from too little to too much freight relative to available capacity,” Vieth noted, regarding the uptick in freight rates. “The path on rates from here will be largely determined by the economy’s ability to hold the line on freight volumes.” When asked about the overall picture, Vieth explained, “Shrinking Class 8 retail sales suggest equipment capacity will continue to tighten, but with sidelined drivers likely returning and lenders extending loans, it may be a while before the market tightens structurally. The road back might be a long one.” The ACT Freight Forecast provides forecasts for the direction of truck volumes and contract rates quarterly through 2020 with three years of annual forecasts for the truckload, less-than-truckload and intermodal segments of the transportation industry. For the truckload spot market, the report provides forecasts for the next 12 months. In 2019, the average accuracy of the report’s truckload spot rate forecasts was 98%. The ACT Research Freight Forecast uses equipment capacity modeling and the firm’s economics expertise to provide unprecedented visibility for the future of freight rates, helping businesses in transportation and logistics management plan for the future with confidence. NORTH AMERICAN CLASSES 5-8 REPORT Also showing improvement with a return to “something closer to life as usual,” ACT’s State of the Industry: NA Classes 5-8 report shows “surprisingly strong” growth in the commercial vehicle market. ACT’s State of the Industry: NA Classes 5-8 report provides a monthly look at the current production, sales and general state of the on-road heavy- and medium-duty commercial vehicle markets in North America. The report differentiates market indicators by Class 5, Classes 6-7 chassis and Class 8 trucks and tractors, detailing measures such as backlog, build, inventory, new orders, cancellations, net orders and retail sales. Additionally, Class 5 and Classes 6-7 are segmented by trucks, buses, RVs and step van configurations, while Class 8 is segmented by trucks and tractors with and without sleeper cabs. This report includes a six-month industry build plan, backlog timing analysis, historical data from 1996 to the present in spreadsheet format, and a ready-to-use graph package. A first-look at preliminary net orders is also published in conjunction with the report. “A survey of the current business landscape shows a picture of intensifying cross-currents, with an uncertain outcome,” Vieth said. “On one side, the economy and motor freight have been surprisingly strong from the beginning of May to mid-July, resulting from dialed back restrictions on workplaces, relaxed shelter-in-place (orders) and the associated revival in business and social activity,” he said. “However, closely associated with return-to-normal has been its downside, the rise of COVID-19 cases.” Vieth noted that the most severe impact of the current recession has been on service sectors, unlike previous downcycles. While important to the economy, service sectors do not rely on truck transportation as heavily as other industries, he said. “The revival of the economy and freight is readily apparent in the sharp increase in Class 8 net orders in June, with upgrades in production, as well,” Vieth said. “Classes 5-7 orders continued their rebound in June, marking the best sequential gain since August 2009.” U.S. CLASSES 3-8 USED TRUCKS ACT’s latest release of its State of the Industry: U.S. Classes 3-8 Used Trucks shows that used Class 8 same-dealer sales volumes were up 6% year to date against the first half of 2019, with average price, miles and age all below June 2019 year-to-date rates, down 15%, 2%, and 7%, respectively. Near term, the report indicated that used Class 8 sales volumes rose 50% sequentially, with average price down 1% month over month, average miles up 1% month over month and average age flat compared to May. The report provides data on the average selling price, miles and age of used Class 8 trucks based on a sample of industry data. In addition, the report provides the average selling price for top-selling Class 8 models for each of the major truck OEMs — Freightliner (Daimler); Kenworth and Peterbilt (Paccar); International (Navistar); and Volvo and Mack (Volvo). “Despite the numbers above, some dealers reported that used truck sales have slowed and continue to be at a lower level than last year and pre-COVID-19,” said Steve Tam, vice president of ACT. “Used trucks were oversupplied before and have been since late 2019. That said, and not surprisingly, some dealers are reporting stronger sales and better customer interest in the last 30 days, while another contingent of dealers is reporting very slow market conditions,” Tam continued. “Stories have surfaced that some trucks selling at auction are bringing better prices than expected, but auctions can be deceptive, as prices via this channel can be higher or lower than expected, depending on who attends any given sale.” U.S. TRAILER REPORT June’s net U.S. trailer orders of 13,441 units were a dramatic improvement (333%) from May’s very low comparison, and were dramatically above June 2019’s level, up 112%. Before accounting for cancellations, new orders of 16k units were up 117% versus May and 41% better year over year, according to the latest issue of ACT’ State of the Industry: U.S. Trailer Report. The report provides a monthly review of the current U.S. trailer market statistics as well as trailer OEM build plans and market indicators divided by all major trailer types, including backlogs, build, inventory, new orders, cancellations, net orders and factory shipments. “It is important to remember that those comparisons are to exceedingly low orders during the first part of this quarter, when widespread COVID lockdowns were in place,” said Frank Maly, director of commercial vehicle transportation analysis and research for ACT. “That said, the improved sequential comparisons do indicate some fleets, after assessing current market conditions, are beginning to cautiously commit to capital expenditures.” According to Maly, June’s improvements were driven by large fleet orders, indicating that improvement is not spread evenly across all OEMs. “We expect that choppiness to continue as we move through the summer.” he commented, “OEMs continue to seek order/build equilibrium, and while some fleets are willing to make investment commitments, most continue to remain on the sidelines, despite some negotiations occurring to help generate order volume.”

ARLINGTON, Va. — The American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index increased 8.7% in June after falling 1% in May. In June, the index equaled 115.3 (2015=100) compared with 106.1 in May. “Not surprisingly, as more states lifted restrictions in June, truck tonnage was robust,” said Bob Costello, chief economist for ATA. “While the gain in June was the single best month since January 2013, the solid gain was not enough to put tonnage back to pre-pandemic levels, but it is close,” he continued. “I am hearing good anecdotal freight reports for July, but I am concerned that freight could slow as more states reinstate restrictions due to increasing coronavirus cases.” May’s drop in freight tonnage was unrevised from ATA’s June 23 press release, standing at -1%. Compared with June 2019, the seasonally adjusted index contracted 1.3% — the third straight year-over-year decline, but the smallest over that period. Year to date, compared with the same period in 2019, tonnage is down 2.4%. The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 115.5 in June, 5.2% above the May level (109.8). In calculating the index, 100 represents 2015. ATA’s For-Hire Truck Tonnage Index is dominated by contract freight as opposed to spot market freight. ATA calculates the tonnage index based on surveys from its membership. These are preliminary figures and are subject to change in the final report, which is issued around the fifth day of each month. The report includes month-to-month and year-over-year results, relevant economic comparisons and key financial indicators.

FORT SMITH, Ark. — ArcBest, a provider of supply-chain logistics solutions, has received a 2020 Top Fleet award for Fleet Innovator from Samsara, a provider of Industrial Internet of Things (IoT) solutions. The Fleet Innovator award is given to a fleet that offers technology-forward solutions using telematics and API (application programming interface) integrations to improve operations. Companies receiving this recognition must demonstrate the use of at least two different Samsara products to leverage real-time data and make a quantifiable impact on business operations. “At ArcBest, we have a focus on technology, data, processes and efficiency, as well as using tech to help us better serve customers and provide a great experience,” said Michael Newcity, chief innovation officer at ArcBest and president of ArcBest Technologies. “We have a successful partnership with Samsara that has a meaningful business impact, and we are proud to receive the Fleet Innovator award for 2020.” ArcBest and ArcBest Technologies began working with Samsara to meet electronic logging device (ELD) compliance requirements for ABF Freight, ArcBest’s less-than-truckload carrier. ELD technology synchronizes with a vehicle’s engine to record a driver’s off-duty and on-duty time, electronically recording hours of service and automatically transmitting the data to the U.S. Department of Transportation (DOT). The collaboration effort resulted in an innovative, customized digital platform. The technology includes an easy-to-use driver app and allows for operational efficiencies such as electronic daily vehicle inspection reports and real-time GPS, as well as a single dashboard that allows administrators to view data in one location. “True innovation takes effort and requires strong collaboration and hard work,” Newcity said. “Our ongoing collaboration with Samsara has resulted in a solution that fits our unique business needs and helped us reduce complexity within our operations.” ArcBest is among five Top Fleet winners for 2020; to view the full list of winners, click here. “We’re continuously inspired by the leadership our customers, like ArcBest, have shown this year, especially given the unprecedented challenges of the past six months,” said Kiren Sekar, executive vice president of products and marketing for Samsara. “This year’s Top Fleets winners set the standard for fleets and exemplify innovation on the road. We’re excited to partner even further as we develop new technologies to help fleets improve efficiency, boost their bottom line, and keep their drivers safe.”

June U.S. sales of new Class 8 trucks rose 42.7% over dismal May sales figures but didn’t come close to matching June 2019 numbers. According to ACT Research, 13,567 Class 8 trucks were sold on the U.S. market in June, far behind (43.2%) the 23,900 sold in June 2019. Kenny Vieth, ACT Research’s president and senior analyst, credits the increase to production levels. “April, with only 2,504 trucks built, was the lowest production month since we started keeping records in 1979,” he told The Trucker. That number represents trucks built throughout North America, not just in the U.S. Manufacturing closures and slowdowns, including those that occurred at plants that supply parts to truck builders, played a large role in the low April production. May saw production increases to 6,791 trucks, before leaping to 19,167 trucks built in June, a 182% increase. “The increased production suggests that the supply chain has mostly gotten the bugs worked out,” Vieth said. Of the 13,567 Class 8 trucks sold in June in the U.S., 4,659 — or 34.6% — were destined for the vocational market in applications such as dump, trash or other non-fifth-wheel uses. That’s far ahead of the 2019 average, when 26.9% of new Class 8 trucks went to vocational purposes. As with the lower sales numbers, COVID-19 plays a role in the higher percentage of vocational trucks. While much of the country shut down, work for vocational trucks remained steady and, in some cases, increased. Road construction, for example, benefited from in inflow of stimulus dollars. Many of the Class 8 trucks destined for over-the-road (OTR) use were sold to fulfill orders already on the books. Carriers that are replacing fleet vehicles are finding trade prices to be advantageous. “Late-model tractor prices are holding up very nicely. If a carrier is replacing trucks and trading in models that are three years old, they’ll find favorable trade values,” Vieth explained. Regarding the used Class 8 market, ACT’s State of the Industry: U.S. Classes 3-8 Used Trucks report showed used truck sales climbing 54% in June over May numbers. Compared to June 2019, sales rose 6%. For the year to date, the average used truck price was down 13% compared to the first six months of last year. The odometer reading of the average used truck sold was down 3%, and tractor age also dropped, by 8%. Vieth was quick to point out that late-model trucks are selling faster than older models. “If you look at a three-year old truck, it has ADAS (advanced driver-assistance systems) and it gets great fuel mileage,” he said. “Used truck prices for late-models are still very high, but when you go back seven or eight years, nobody wants those models.” Truck sales, of course, follow economic trends, and what lies ahead for 2020 is still dependent on the effects of COVID-19. As of this writing, individual states had begun to reopen their economies, but spikes in infection rates and COVID-related deaths have caused many officials to reconsider the wisdom of returning to “normal” just yet, and some states are reimposing restrictions. “Right now, we’re seeing a lot of cutbacks as numerous states are tightening up due to the resurgence of COVID-19,” Vieth said. Perhaps Lael Brainard said it best. “The pace of improvement may slow if a large portion of the easiest gains from the lifting of mandated closures and easing of capacity constraints has already occurred. Moreover, weekly COVID case counts have been rising, and some states are ramping up restrictions,” the Federal Reserve Board of Governors member said when addressing a mid-July virtual meeting of the National Association of Business Economists. “Rolling flare-ups or a broad second wave of the virus may lead to widespread social distancing — whether mandatory or voluntary — which could weigh on the pace of the recovery and could even presage a second dip in activity,” Brainard concluded. In short, just as the economy began to recover, actions to combat the increased numbers of COVID-19 victims could slow, or even reverse the current recovery.

DOWNERS GROVE, Ill. — Roadrunner Freight, a national less-than-truckload (LTL) provider, plans to expand its network in August with the opening of three new service centers in Chicago, Philadelphia, and Riverside, California. The new facilities will add 169 dock doors to the carrier’s network. “These network changes are part of a broader effort within Roadrunner Freight to significantly invest in service,” said Frank Hurst, president of Roadrunner Freight. “We have seen a surge in demand since beginning our ‘Ship It Like You Own It’ commitment in October last year, and we are excited to continue growing our network to benefit both our customers and drivers.” On Aug. 17, Roadrunner Freight’s Chicago-area service center will move to a new 93,000-square-foot facility at 850 Windham Parkway in Bolingbrook, Illinois. The facility will also house Roadrunner Freight’s corporate functions, including linehaul, safety and human resources. “This new service center in Chicago will be double the size of our existing facility,” said Joseph Toussaint, senior vice president of sales and marketing for Roadrunner Freight. “Chicago is one of our busiest markets, and this state-of-the-art facility will drastically increase our available capacity.” Expected to open Aug. 3, the new Philadelphia facility is at 3820 N 2nd Street. “In addition to improved local service in the Philadelphia market, this facility will serve as a gateway into the Northeast and provide improved transit times and service,” said Doug Kasel, vice president of Eastern operations for Roadrunner Freight. A new location slated to open in early August, the Riverside, California facility will provide support to the Roadrunner Freight’s e-Commerce service offering. This facility will combine with existing service centers in Los Angeles and Commerce, California, to give Roadrunner Freight 280 dock doors and 257,909 square feet in the Southern California region. The Riverside location will be 6550 Box Springs Blvd. “The opening of a third service center in the LA basin, and fourth in all of California, is a direct result of our growth within the e-Commerce industry,” Toussaint said. “The Riverside service center will work strategically with our commerce and Los Angeles facilities to continue providing high-quality LTL service to our retail and e-Commerce customers in these major markets.” Hurst said the company is also reviewing additional locations for future expansion.

SEATTLE — Digital freight network Convoy now offers nationwide dedicated freight through its mobile app, allowing carriers to bid on dedicated freight contracts that can last up to six months. The new feature is designed to reduce the time carriers spend securing individual loads, enabling smaller carriers and owner-operators to focus on driving and generating revenue. “Small fleets and owner-operators comprise the vast majority of carriers in the U.S. and we are proud to provide them with access to the same dedicated freight opportunities that larger fleets have enjoyed for years,” said Amir Pelleg, senior director of product for Convoy. “With freight demand experiencing extreme volatility as the economy adapts to a new normal, it is vital for all carriers to have easy access to predictable and consistent work.” Approximately 90% of carriers in the U.S. have 10 or fewer trucks. These owner-operators and small fleets can spend up to 10 hours each week searching for individual loads to keep their trucks full. That equates to 520 working hours each year spend not driving and not earning. Dedicated loads offer carriers guaranteed revenue with consistent work hauling the same shipment along the same route. Historically, dedicated freight has been reserved for large or medium-size carriers because of the perception that small carriers are less reliable. Convoy uses machine learning and automation to identify reliable drivers and fleets. “Many customers and brokers will ask you, ‘Do you have 20 trailers?’ in order to access their dedication contracts. And for us, with only six trucks, that would be impossible to secure those contracts,” said Inderjit Gill of JSG Logistics, a Freemont, California-based owner-operator who has been working with Convoy since 2019. “But the fact that Convoy closed that bridge and made it possible so we could be known as a dedicated carrier on a dedicated route has saved our business during turbulent times. Thanks to Convoy, we don’t need to have a huge business in place to be part of a dedicated workflow.” Using Convoy’s mobile app, all carriers can search for and bid on dedicated freight contracts that include as many as 40 live and drop loads every week, for up to six months. Once a carrier wins a dedicated freight contract, Convoy’s automated system will send loads directly through the app. “This is the first time we’ve had access to dedicated freight. As a small operation, we’ve never been able to access anything like this from the traditional brokers we’ve worked with,” said Kenia Vazquez of KRV Transport, a San Antonio, Texas-based carrier who has been working with Convoy since 2018. “Dedication gives me peace of mind that I don’t have to be constantly looking for new shipments. With dedicated freight I know I’m going to have the loads I want and that I need to keep my business running.” Gaining dedicated freight contracts gives owner-operators and small fleet owners added stability, providing assured income during a time of uncertainty as the U.S. faces a global pandemic. “Right now, about 20% of our shipments that we do with Convoy are dedicated, and I hope to grow this with more of my business increasingly being dedicated,” said Eliza Cruz of Beep Beep trucking, a Sacramento, California-based owner-operator who has been working with Convoy since 2016. “Drivers want to be able to book their shipments a week in advance. With dedicated freight, we don’t spend a lot of time looking for freight and we can focus solely on driving.”

BLOOMINGTON, Ind. — FTR’s Trucking Conditions Index reading for May rebounded from its worst-ever level in April to a reading of -5.19. While much improved, May’s reading is still quite negative from a historical perspective. A sharp increase in freight was primarily responsible for the improvement, as rates and utilization were still weak. Consumers led the way as May brought the expected rebound in freight indicators. A less negative industrial production forecast is the main contributor to a firmer freight outlook for the balance of 2020. Details of the May Trucking Conditions Index can be found in the July issue of FTR’s Trucking Update, published June 30. Additional commentary provides updates on the impacts of the COVID-19 pandemic and expectations for recovery. Beyond the Trucking Conditions Index and FTR’s COVID-19 intelligence, the Trucking Update includes data and analysis on load volumes, the capacity environment, rates, costs and the truck-driver situation. “The spot market is the strongest in two years, which certainly suggests upside to our current outlook,” said Avery Vise, FTR’s vice president of trucking. “However, the recent increases in COVID-19 cases in some large U.S. states mean that we are not out of the woods yet, as some states are moderating their reopening and many universities and school systems remain uncertain about their plans,” Vise continued. “We are also concerned that the recovery to date is fueled substantially by unprecedented financial assistance from Washington and that further such assistance might be necessary to keep the economy on track.” FTR’s Trucking Conditions Index tracks the changes representing five major conditions in the U.S. truck market — freight volumes, freight rates, fleet capacity, fuel price and financing. The individual metrics are combined into a single index that indicates the industry’s overall health. A positive score represents good, optimistic conditions. Conversely, a negative score represents bad, pessimistic conditions. Readings near zero are consistent with a neutral operating environment, and double-digit readings in either direction suggest significant operating changes are likely.

COLUMBUS, Ind. — ACT Research’s July freight forecast and commercial vehicle outlook reports, released earlier this week, continue to reflect the impact of COVID-19 on the trucking industry, but both reports showed improvement. According to the July installment of ACT’s Freight Forecast, a 56-page monthly report, ACT’s Spot Leading Indicator showed a 10% year-over-year increase, according to Tim Denoyer, ACT’s vice president and senior analyst. He described the increase as “a sharply positive reversal.” The Spot Leading Indicator is a survey-based measure of the direction of rates, and the monthly Freight Forecast includes volumes and contract rates for the truckload, less-than-truckload (LTL) and intermodal sectors of the transportation industry. “The pandemic has caused twin supply shocks in the freight market. First, the CARES Act is incentivizing the unemployed to not come back to work, creating a near-term driver shortage. And second, while there are still plenty of parked trucks at the moment, low truck production this year will tighten equipment capacity over the medium term,” Denoyer continued. “We expect this to cause a bit of back and forth in spot rates, but we see the medium-term trend moving higher on tighter supply and recovering demand.” According to ACT’s latest release of the North American Commercial Vehicle Outlook, forecasts for 2020 were marked up across the board in July. The report credits the uptick to the impact of nearly $6 trillion in stimulus to date, better-than-expected economic activity in June, freight rates boosted by a driver shortfall that was created by massive layoffs and extended unemployment benefits, and preliminary June metrics that were well above trend. “COVID-19 continues to impact the CV industry, as well as the US and global economies, but we do not believe state-level closures are likely from here,” said Kenny Vieth, ACT’s president and senior analyst. “That said, the raging case counts in Sunbelt states raise the risk of supply-chain disruptions, if any of the heavily-impacted states are shuttered for several weeks, as too much July 4th weekend fun is expected to drive a case surge into the end of the month,” he continued. “A vaccine is seen as the key to unlocking a more broad-based recovery, as the simplest human interactions will no longer have to be weighed and justified.” Vieth noted that, for the most part, the nation’s transportation industry is designed to meet the basic human needs of food, shelter, clothing and transportation. “Even as the economy works to regain its footing post-COVID and pre-vaccine, freight markets should be somewhat less impacted because, while we can choose not to go to restaurants, not eating is not an option,” he said. Spot rates and demand for commercial vehicles are closely related, he noted. “Combined with the OEMs and their supply base pushing hard to restore material and assembly flows, underlying economics do not appear to be as punitive as initially estimated,” Vieth said. “Additionally, spot freight rates, sitting at the intersection of equipment supply and freight demand, are the leading indicator of heavy CV demand cycles. Because of these factors, we’re seeing stronger and sooner production increases.” ACT’s North American Commercial Vehicle Outlook provides a complete overview of the North American markets and studies relevant, current market activity to highlight orders, production and backlogs. Information included in the report covers forecasts and current market conditions for medium and heavy-duty trucks/tractors, and trailers; the macroeconomies of the U.S., Canada and Mexico; publicly traded carrier information; the impacts of oil and fuel prices; freight and intermodal considerations; and regulatory environment impacts.

ARLINGTON, Va. — The trucking industry generated $791.7 billion in revenue in 2019, moving 11.84 billion tons of freight, according to ATA American Trucking Trends 2020, the latest edition of American Trucking Associations’ (ATA) annual report produced by the association’s economic department. “Despite a challenging year, the data contained in American Trucking Trends shows the industry was in good shape entering the global pandemic,” said Bob Costello, chief economist for ATA. “Trends continues to be an indispensable, one-stop resource for decision makers to have the latest information about the state of the trucking industry.” Other findings in the report include: In 2019, trucking’s revenues accounted for 80.4% of the nation’s freight bill. Trucks moved 67.7% of surface freight between the U.S. and Canada and 83.1% of cross-border trade with Mexico, for a total of $772 billion worth of goods. There are 7.95 million people employed in trucking-related jobs, up 140,000 from the previous year. This includes 3.6 million professional drivers. Women make up 6.7% of the industry’s drivers and minorities account for 41.5% of truckers. Most carriers are small companies — 91.3% of fleets operate six or fewer trucks and 97.4% operate 20 or fewer. “Sound policy relies on sound data, and American Trucking Trends contains the kind of up-to-date, reliable data that policymakers need to do their job,” said Chris Spear, president and CEO of ATA. To buy a copy of the full report, click here.

PORTLAND, Ore. — Spot market rates and volumes increased across all equipment types as economic demand returns to seasonal trends, according to DAT Freight & Analytics, which operates the industry’s largest online marketplace for spot truckload freight. Van, reefer and flatbed numbers all ended up positive month over month, with rates and volumes trending higher. The DAT Truckload Volume Index, a measure of dry van, refrigerated (reefer) and flatbed loads moved by truckload carriers, rose 13.7 percent from last month, a 9.4 percent increase over June 2019. “The surge we’re seeing in spot truckload rates and volumes is consistent with summer trends, but consumer habits continue to be impacted by COVID-19,” said Ken Adamo, chief of analytics at DAT. “For instance, there’s been an early increase in demand for pressure-treated lumber as people tackle home improvement projects. But produce growers and distributors are contending with soft restaurant demand as states reopen at different speeds with different rules.” Van rate jumps 21 cents Nationally, the June load-to-truck ratio for vans nearly doubled for the second month in a row to 3.5, up from April lows of 1.0. It was up 12.9 percent from this time last year as well, indicative of a market with more freight than trucks posted on the DAT One load board network. Spot van rates averaged $1.80 per mile nationally, up 21 cents compared to May and down 9 cents versus June 2019. Reefer volumes increase 4.5% Spot reefer volumes were up 4.5 percent month-over-month due to seasonal produce freight from the Southeast, West Coast and Pacific Northwest. The reefer load-to-truck ratio was 5.5, more than triple April’s all-time low of 1.7 loads per truck. The national average reefer spot rate was $2.15 per mile, up 13 cents compared to May but 9 cents lower year over year. Construction boosts flatbed activity A surge in construction activity continued last month’s sharp increase in the national flatbed load-to-truck ratio, 24.8 in June, the highest number since July 2018. June flatbed volume was up 15.9 percent from May and almost even with 2019 numbers. The national average flatbed spot rate was $2.07 per mile, 17 cents more than May but 10 percent lower than June 2019. DAT Freight Outlook Importers will be busy staging retail freight in warehouse markets to prepare for back-to-school shopping season, which runs from July 4 through the end of August. There are also positive signals for the flatbed market, with a major uptick in suburban single-family home construction, which is considered freight-intensive due to the wide range of materials needed for construction. “There’s clearly pent-up demand in the economy, but the recent surges in COVID-19 cases remain a complicating variable for consumer behavior this summer,” Adamo said. “Retail and consumer packaged goods volumes are way up, but manufactured goods are way down.” Visit dat.com/covid-19 for regular updates on the freight market and DAT’s most recent freight forecasts.