Freight slowing, but no downturn yet: ATA

ALEXANDRIA, Va. (Aug. 15, 2005) — Growth in freight volume will be modest this year compared to ’04 and there will be a favourable supply-demand market this coming fall freight season, predicts American Trucking Associations economist Bob Costello.

Heavy Duty Trucking magazine reports Costello as saying that despite moderation in volumes and a continued deceleration compared to last year, the US economy is not in a significant downturn.

ATA’s seasonally adjusted for-hire Truck Tonnage Index rose 0.7 percent in May, the first sequential volume increase since Jan. Index was 1.3 percent higher than a year earlier. Year-to-date, tonnage was up 3.2 percent higher than the same period in ’04. ATA forecasts 3-3.5 percent growth this year, slightly slower than the 5.7 percent growth last year.

Moreover, tonnage volumes are more modest this year because of a wide disparity between production levels for certain commodities. Example: Domestic steel production is slipping, which could be a drag on tonnage figures going forward, he said.

June loads were up 13 percent. Transportation costs in the food, beverage and consumer products industry rose 23 percent over the past three years, to an average $1.69/mile US, and transportation now accounts for 62 percent of logistics costs, according to the Grocery Manufacturers Association’s benchmark survey on logistics.

High fuel prices are the major reason for higher transportation costs but the survey also cites the driver shortage and reduced capacity. GMA says consumer products companies are shifting to different modes of transportation where possible, trying to improve trailer utilization, taking advantage of continuous move opportunities and partnering with carriers to secure year-round capacity.

— from Heavy Duty Trucking

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