COVID to Keep Freight Markets ‘Tighter for Longer’

With increased employee absenteeism due to the Omicron variant will come tighter freiht markets and capacity, ACT Research reported in its latest freight forecast.

“The freight environment continues to feature strong demand and tight capacity conditions, with a choppy and gradual recovery,” said Tim Denoyer, ACT’s vice-president and senior analyst.

“Omicron is leading to an increase in absenteeism, impacting both transportation and manufacturing in early 2022 and will keep freight markets tighter for longer. Though fleets in our survey are saying absenteeism is a problem for most and some fleets reported a hit to recruiting, other fleets are still seeing growth in recruiting classes.”ACT expects Omicron to be short-lived, after which the recovery in driver capacity will re-engage “fairly soon.”

“Progress de-bottlenecking automotive supply chains will likely be set back temporarily by Omicron, so the everything shortage will be with us for some time,” Denoyer added. “With labor constraints recovering more slowly than normal, bank account balances high and inventories low, the setup for 2022 remains tight in the near-term.”

He concluded, “The silver lining of Omicron is that it may broadly reduce pandemic risks, which would help services recover. Considerable progress has been made against capacity constraints over the past year, and federal stimulus to consumers is over, so we expect industry trends to change in 2022.”

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