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Truck capacity demand will be sharp as Inventories tumble to four-year low

Inventories fell another 0.8% to $58.0 billion in February, the ninth decrease in the past 10 months, Statistics Ca...


Inventories fell another 0.8% to $58.0 billion in February, the ninth decrease in the past 10 months, Statistics Canada reports.

That’s good news for truckers because it indicates that shippers will be unable to live off their inventories when the economic rebound is complete. It also presents a challenge, however, because such low inventory levels indicate that a surge in shipment levels will create a sharp and fast demand for truck capacity.<br>

The inventory-to-shipments ratio stood at 1.27 in February, the lowest level in just over four years. The ratio, which eased back from 1.29 in January, has been trending down since early last year as manufacturers kept inventories in check, along with a gradual improvement in shipments.

The ratio is a key measure of the time measured in months that would be required in order to exhaust inventories if shipments were to remain at their current level.

A significant drop in goods-in-process inventories (-3.2%), coupled with lower raw materials (-0.6%) were the factors behind the overall decline. Finished-product inventories were up 0.6% to $20.2 billion, the first increase since April 2003.

The decrease in inventories was concentrated in the durable goods industries, with aerospace (-11.8%), computers (-2.4%) and railroad rolling stock (-9.9%) contributing.


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Truck News

Truck News is Canada's leading trucking newspaper - news and information for trucking companies, owner/operators, truck drivers and logistics professionals working in the Canadian trucking industry.
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