US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

Continuing Demand for RVs Spurs Manufacturers to Expand Production

We have frequently mentioned on this site how the pandemic has increasingly sent Americans outdoors for their entertainment. Homeowners looking to get out of their homes – while meeting guidelines for minimizing the spread of COVID – have increased the amount of time spent outside. Consumers’ spending habits have reflected this, as demand for a wide range of outdoor products – such as pools, decks, playground equipment, and other items – have surged.

Among the products that have seen the largest increase in sales during the pandemic are recreational vehicles (RVs). This is not surprising, as these craft allow families and other groups of people to enjoy the outdoors while also providing a higher level of comfort than simple camping. Indeed, manufacturers of these vehicles – recognizing that many of these buyers are more affluent – have added amenities to their RVs, such as additional cabinetry, more extensive bathroom facilities, and more attractive interior components.

Demand for RVs has been so strong that Thor Industries – a leading RV producer – announced plans to build two new RV manufacturing sites in Michigan. These facilities, which will employ more than 400 people, will complement Thor’s existing network of production sites, and increasing the company’s RV manufacturing capacity.

Freedonia Group experts will continue to monitor the US RV market and see how manufacturers cope with the increasing demand for the craft as the US gradually emerges from the depths of the COVID-19 pandemic.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially in the Consumer segment and the Recreational Vehicles in the US study. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Continuing Shortage of Shipping Containers Another Blow to Global Supply Chain

US consumers have been confronted with sharply rising prices for a wide range of products – most notably, groceries and gasoline – and in a number of cases, the cause is the “supply chain”. While something of a mystery to many, the supply chain is simply the processes needed to get goods to the stores where people shop. The supply chain includes:

  • trucks (and truckers) to carry items to and from manufacturing plants, warehouses, and retail stores
  • pallets to serve as stable platforms for boxes and other items during shipment
  • rail lines and train cars to carry cargo once it is unloaded from ships to distribution centers
  • ships to carry items made overseas to US harbors
  • shipping containers that transport bulk cargoes on ships to railheads

While there is currently a shortage of most of these items across the US, it is the lack of shipping containers that is currently most acute, causing delays in product shipments, shortages on the shelves, and prices of available goods to climb. This shortage of shipping containers has been caused by a number of factors, key among them:

  • a surplus of empty containers in many parts of the US, as there are not enough trucks and railcars to send them back to port facilities for overseas shipment
  • backups at US ports – many ships (loaded with containers) are unable to be unloaded and re-filled with shipping containers
  • shortages of workers at warehouses and lading docks to remove goods from containers at distribution facilities, which has reduced the turnaround of containers for shipment back to ports

Though shipping experts believe there is enough global capacity of shipping containers, there will continue to be a shortage of containers in the US until the many bottlenecks in domestic supply chains can be resolved. This, too, cannot be solved quickly enough, even as the US economy improves and workers return to their jobs – including those in the crucial logistics sector.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products and Consumer Goods areas, as well as Freedonia Focus titles such as Freight by Waterway: United States, Freight Services: United States, Freight by Rail: United States, and Freight by Truck: United States. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Own All Four Railroads? “Monopoly” Might Be a Bit More Difficult Soon

An executive order signed in early July laid out the Biden administration’s plan to reduce the strength of monopolies across the US economy. In the freight industry – namely, freight by rail and freight by waterway – the administration believes consumers and small companies are at a disadvantage due to the power of the limited number of major players.

In the rail industry, competition is largely limited by high concentration – the four largest firms control the vast majority of the market – and each rail company’s captive control of its rail system. The executive order encourages the Surface Transportation Board to adopt a system, known as “reciprocal” or “competitive switching”, which has been proposed many times in the past. If put in place, rail shipping customers that are served by one railroad are able to accept bids from competing railroads in the area. The bidding company would pay a fee to utilize the dominant railroad’s infrastructure, increasing the number of potential choices rail shipping customers have among railroad firms and placing downward pressure on shipping rates. Furthermore, it may open the door for smaller rail shipping firms to increase their market share.

For ocean shippers, the executive order encourages the Federal Maritime Commission to take further action to reduce export fees and allows the Justice Department to enforce their decisions.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, as well as Freedonia Focus titles such as Freight by Waterway: United States, Freight Services: United States, Freight by Rail: United States, and Freight by Truck: United States. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Automotive & Transport      Covid-19    

Trans-Pacific Shipping Is Such a Big Concern That Home Depot Contracted Its Own Ship

Business is booming for many, but the question is…how’s inventory and how are the stocks of key supplies looking? With major ocean shippers struggling to fully meet contract commitments and limited other available space on ocean liners, logistical challenges remain.

Home Depot – a major importer which had resorted to costly air freight to keep tool stocks up during this era of high demand and production challenges – recently announced that it has booked its own ship dedicated to carrying only its goods between China and the US. Companies without the means to take this step for its own charter have started ordering shipments for holiday season stocks earlier than usual – now or earlier, rather than August and September. However, as other companies make that move, it could lead to more delays and congestion in ports.

Even if taking the the unprecedented step of contracting a dedicated ship, retailers still face potential port congestion. It also leaves us wondering…will there be enough trucking capacity to move the goods that make it to port by the holiday season? That has been a challenge this whole pandemic era and continues to cause breaks or delays in logistics supply chains.

Companies will continue to get creative, but customers will still have to order early and be prepared for delays in delivery for at least the near term.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products and Consumer Goods areas, as well as Freedonia Focus titles such as Freight by Waterway: United States, Freight Services: United States, Freight by Rail: United States, and Freight by Truck: United States. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Automotive & Transport      Consumer Goods      Covid-19    

Shortage of Truckers Among Causes of Supply Chain Issues Across the US

Recently we posted on this page an article about the rising costs of so many things, from groceries and consumer goods to building materials. While there are a number of factors driving up costs, one that is seldom appreciated by the consumer is the trucker shortage – the people who drive the trucks that carry products across the US. This dearth of drivers is a key reason why store shelves are lacking inventory – in many cases, there is simply no one to take finished products to warehouses and retailers.

Indeed, while this is not a new concern, the COVID-19 pandemic has exacerbated the shortage of long-haul truckers in the US, precisely at a time when more of these professionals are needed to cope with the surge in e-commerce and deliveries of foodstuffs and other items. Key causes of the trucker shortage include:

  • low wages relative to other traditionally “blue-collar” jobs
  • long hours and frequent periods of absence from family and friends, which make it difficult for people to remain in the industry
  • frequent delays in unloading and loading trucks, which can limit the amount of time drivers can actually spend on the road – drivers are generally paid by the mile, so these delays literally cost drivers time and money
  • frustrations about a lack of safety protocols (such as access to masks and PPE) during the COVID-19 pandemic
  • the lack of younger truckers to replace older drivers retiring out of the industry
  • competition from last-mile and short-haul driving jobs that have boomed along with e-commerce and food delivery, but often require less training and definitely require more regular scheduling and/or less time away from home

With no immediate solution to this shortage of long-haul professionals on the horizon, logistics professionals will continue to look for creative solutions while manufacturers, store managers, and – ultimately – the US consumer will continue to experience higher prices and delivery delays.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Automotive & Transport      Covid-19      Services