The vast majority of respondents to a survey conducted by Redwood Logistics, believe domestic manufacturing activity will be either slightly or significantly higher over the next 12 months.
Manufacturers expected demand to continue to expand over the next 12 months due to most of the sectors seeing increased spending due to the pandemic. Over half of respondents expect to see further expansion in the food and beverage, consumer spending and electronics sectors.
Between 20% and 35% of respondents anticipate manufacturing activity to ramp up in the home and furniture, auto and parts, chemicals and oil and gas sectors as well.
Respondents were slightly less optimistic about the machinery and fabricated materials sectors, but more than 10% still expected to see growth.
“A period of yo-yoing supply and demand sent trucking capacity on a volatile ride earlier this year, but rebounding consumer spending and continued strength in essential goods markets have led to continuously tight capacity over the last several months,” said Christina Ryan, executive vice president, Managed Services, Redwood Logistics.
While imports slowed to a crawl between March and July due to the pandemic, the U.S. has been experiencing something of a mid-pandemic restocking boom since about August.
Despite pandemic-related shutdowns, 2020 has not been colored by the intense trade wars and tariff hikes seen throughout 2019, and most experts expect the current surge to last through at least early 2021. The uptick in import activity has been dramatic over the past couple of months, with the FreightWaves SONAR Ocean Shipments Index up a staggering 62% year-over-year.
Shippers expect this trend to continue in the near future. Well over half of survey respondents believe trucking capacity will either significantly or slightly tighten over the next six months. Almost 30% of manufacturers expect already-tight capacity to remain the same.
Only about 20% of respondents anticipate looser capacity in the short term. Manufacturing rebounds, coupled with renewed consumer demand, have led to a tight trucking market. While most shippers expect this to remain the case over the next six months, the majority expect rate hikes to come in under 10% in the 2021 bidding cycle.
“Service spending is expected to rebound somewhat with the introduction of a coronavirus vaccine, likely bringing down spending in sectors like durable consumer goods,” said Ryan. “The timeline for these shifts is hard to pin down, however, and the confidence level of newly vaccinated Americans is even more difficult to predict. For now, the food and beverage, consumer goods, electronics and home goods sectors are expected to continue their ascent.”
