Trucking's long-term outlook appears good
Sep 30, 2003 12:00 PM, By Sean KilcarrFreight volumes continue to be remarkably volatile, though experts contend the long-term outlook looks good for trucking.
The American Trucking Associations (ATA) said truck tonnage decreased 9.5% in August after rising 5% in July. Year-to-date, however, truck tonnage is up 2.9% overall compared with the same time period in 2002.
For Bob Costello, ATA's chief economist, that means the signs are good for trucking.
"High volatility in truck tonnage continued in August, but we had expected the number to be low due to manufacturing production falling in August, the blackout on the East Coast, and the low level of retail sales," he said.
According to the Commerce Department, retail sales rose only 0.6% in August after climbing 1.3% in July.
"Despite the August figure, I still believe that truck tonnage is on a recovery path," Costello said. "Between very lean inventories throughout the supply chain and improvement in new orders for manufactured goods, truck tonnage should continue to increase. That doesn't mean that we still won't have months like August, but the trend line will continue upwards."
Satish Jindel, president of Pittsburgh PA-based SJ Consulting, said both truckload and LTL carriers are doing well in terms of freight demand and rate increases, though that's largely because truck and trailer capacity is much tighter today.
"All across the board, the market is good for the transportation industry," he said. "There's robust volume on the truckload side, and volumes are looking good on the LTL side. Rate increases are staying in place, and they've not had to give them away with discounts."