Trucking reports predict slow economic growth

The April tonnage report from the American Trucking Associations’ indicates that the pace of business in the national trucking industry is improving but inconsistent. And an economic forecast report from the Association suggest a slow pace of overall economic recovery.

April’s seasonally adjusted Truck Tonnage Index dipped 0.7% in April after gaining a revised 1.9% in March 2011. Compared with April 2010, tonnage climbed 4.8%. In March, the tonnage index was 6.5% above a year earlier.

“The drop in April is not a concern. Since freight volumes are so volatile truck tonnage is unlikely to grow every month, even on a seasonally adjusted basis,” ATA Chief Economist Bob Costello said in a statement. “I expect economic activity, and with it truck freight levels to grow at a moderate pace in the coming months and quarters.”

According to the ATA, trucking serves as a barometer of the U.S. economy, representing 67% of tonnage carried in 2010 by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled more than 8.8 billion tons of freight in 2009. Motor carriers collected $544.4 billion, or 81% of total revenue earned by all transport modes in 2009.

Costello said recent declines in oil and gas prices bode well for all economic sectors.

“The industry, and the economy at large, should benefit from the recent declines in oil and diesel prices,” Costello said. “Lower fuel costs will help freight volumes and motor carrier bottom lines going forward.”

Going forward, the trucking sector may not see tonnage increase to pre-recession levels until 2016, according to an ATA forecast. The ATA reports that general freight traffic fell 22.5% between 2007 and 2009 before improving 9.4% in 2010. Freight traffic is estimated to grow at an average rate of 4.1% between 2011 and 2016, according to the ATA.

“All modes of freight transportation were severely impacted during the recent recession as total freight tonnage and revenue contracted 19 percent and 18 percent, respectively, from the peak to trough. Yet, the long-run outlook still remains bright for all modes. Total freight tonnage is projected to grow 24 percent over the forecast period, while total freight transportation revenue is forecasted to jump 66 percent by 2022,” noted the ATA forecast report.

The ATA forecast report estimates economic growth — but barely.

“Still, the unemployment rate is likely to remain stubbornly high, light vehicle sales are not expected to return to pre-recession levels until 2013, nonresidential construction will not exceed its previous peak until 2018, and even by 2022, housing starts will still be about 15% below their 2005 peak of 2.073 million units. With this as a backdrop, the nation’s freight pool is expected to expand throughout the forecast period, but top line tonnage will not exceed pre-recession levels until 2016-17.”

And it’s no surprise that trucking sector employment has declined. In 2009, there were slightly fewer than 6.9 million people working in trucking-related jobs across all sectors of the economy, down 480,249 jobs, or 6.9% from 2008 levels.

The ATA report also provides an interesting point about the trucking sector in Arkansas: “While California and Texas may have the most people working in the trucking industry, Arkansas and Nebraska, in terms of percentage of total state employment, were on top. In Arkansas, 3.2 percent of all people employed in the private sector worked for a trucking company, while the same was true for 3.4 percent of all people working in Nebraska.”