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Home » Travails aside, a pretty good year for trucking
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Travails aside, a pretty good year for trucking

January 23, 2014
DC Velocity Staff
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The headlines tell the story of an industry seemingly down on its luck. But the day-to-day shipping world, at least in 2013, told a different story.

A monthly seasonally adjusted for-hire tonnage index published by the American Trucking Associations (ATA) increased by 0.6 percent in December from the prior month. The December increases, coupled with a revised 4.7 percent jump in November over October's levels, pushed the index 6.2 percent higher for 2013, its best year since 1998.

The December index represented a record monthly high and an 8.2-percent gain from December 2012. In addition, the November increase was revised sharply upward from the 2.6-percent gain originally reported in late December, the group said.

The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustments, equaled 123.0 in December. That was 1.4 percent below the previous month, ATA said.

Bob Costello, ATA's chief economist, said the fourth-quarter results confirmed that tonnage levels accelerated strongly in the second half of the year and that the U.S. economy is now in better shape than is widely believed.

"I'm seeing more broad-based gains now. The improvement is not limited to the tank truck and flatbed sectors like earlier in [2013]," Costello said. He said tonnage levels should remain strong in 2014 with a pickup in manufacturing and consumer spending as well as continued demand for trucks to support the growth of hydraulic fracturing for shale oil and gas deposits.

The second-half strength came amid the trucking industry's ongoing struggles to cope with increased government regulations, a shortage of drivers in areas around the country, and cost inflation for a wide range of equipment. The industry is also facing increased competition from rail intermodal services that has led to a secular decline in the market share held by truckload carriers.

"AN ATYPICAL PATTERN"
The ATA index was not the only positive data point for trucking activity. Noncontract, or "spot market," truckload loads in December soared 45 percent over 2012 levels, according to data released late last week by DAT, a Portland, Ore.-based consulting company. The December results were 10 percent above November figures, the firm said.

The numbers are surprisingly strong given that December is generally a quiet seasonal period and that inclement weather that often occurs during the month has a dampening effect on freight volumes. A spokesman for DAT called the year-over-year and sequential results an "atypical pattern."

The consultancy has attributed about two-thirds of the year-end increase to broad improvement in the economy and, by extension, freight demand. Carriers reaped the gains from a late-year surge in potato traffic and increases in meat production, the firm said. Strong growth in the energy and automotive sectors continued into year-end, also boosting carrier results, the firm said.

The remaining one-third was related to more seasonal factors such as a pickup in construction activity during what is normally a slow period and a pull-forward in ordering by users of raw materials ahead of expected 2014 commodity-price increases, the firm said.

Ironically, truckers may have received a fourth-quarter windfall from the problems faced by parcel giant UPS Inc. in delivering holiday packages. Confronted with a deluge of late-arriving orders for pre-Christmas delivery and with its network stretched to the limit, UPS soaked up significant truckload capacity—at very high rates—just to get line-haul packages to their destinations, according to two people familiar with the matter.

Transportation Trucking Truckload
KEYWORDS American Trucking Associations DAT UPS
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