A first-half 2022 economic outlook issued by truckload carrier U.S. Xpress Wednesday calls for strength in freight demand to last through at least the first half of the year. The company highlighted some caveats, most notably the impact of inflation on consumer spending.
Inventory replenishment is likely to carry freight demand through the beginning of the year, the report said. After that, it’s really up to how much of a bite inflation takes out of the consumer’s wallet.
“If the economy can maintain a recovery trajectory while staving off inflation, then expect another year of robust freight volumes and heightened truckload rates,” the U.S. Xpress (NYSE: USX) report stated. “However, if consumption does buckle under the weight of inflation and lackluster consumer sentiment, then supply chains will have to devote several months to rebuilding inventories before anyone will have the chance to catch their breath.
“We expect freight volumes to run at a fever pitch for at least two more quarters and remain strong for the balance of the year.”
Inflation hasn’t crimped retail sales yet
A tightening in consumer spending due to a 40-year high in inflation (the Consumer Price Index was up 7.5% on an annualized basis in January) would no doubt hurt freight demand. However, it is a double-edged sword.
A cooling in spending would allow supply chain bottlenecks to ease and backlogs of orders across many verticals to be filled. But if the consistent bright spot of the current…
