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Trucking Looms Large In Freight
Forecast
Trucking will
increase its share of the nation’s
freight pool and continue to
dominate domestic freight movement
into the next decade, according to
the American Trucking
Associations’ (ATA) U.S. Freight
Transportation Forecast to 2018.
Despite recent bumps in the road,
the forecast, which reports on the
present and future of the entire
U.S. freight transportation
industry, predicts growth for all
modes, but an even greater role for
trucking in moving and shaping the
country’s economy.
“We’re an important part of
the quality of life in this country”
says ATA President and CEO Bill
Graves. “The United States achieved
economic greatness with the help of
a state-of-the-art transportation
system. And trucks will continue to
lead the freight landscape.”
The forecast
projects trucking’s total tonnage
share to rise to 69.7 percent in
2012 and to 70 percent by 2018 from
69 percent in 2006. Above-average
growth in key truck commodities and
the inherent flexibility and on-time
delivery associated with trucking is
driving industry growth.
….Although trucks will remain the
largest mode of freight transport,
other transport modes also are
expected to carry more freight as
overall tonnage in the United States
increases.
The report
predicts robust growth in
rail/intermodal and air freight as
well. These two modes represent the
fastest growing segments during the
forecast period, although neither
mode will have more than two percent
of the total tonnage market by 2018.
….Total rail tonnage (including
carloads and intermodal units) will
edge up to 14.7 percent of domestic
tonnage in 2018 from 14.6 percent in
2006. Water passage tonnage, which
accounted for 6.5 percent of the
domestic transport market in 2006,
is expected to expand by 1.6 percent
a year, on average, over the next
six years and 1.5 percent a year
thereafter through 2008.
….With future volumes tied to
petroleum and natural gas demand,
pipeline transport is expected to
grow 1.6 percent per year, on
average, between now and 2012,
according to the forecast. Pipelines
share of tonnage, however, will drop
to 9.5 percent in 2012 from 9.8
percent in 2006. |
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TRANSPORT INDUSTRY NEWS
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In May,
the U.S. trucking industry
increased average transaction prices
1.9% from a month ago and 7.8% from
the same month a year ago. That has
set alertdata’s forecast trajectory
on an even steeper path than last
month’s upwardly revised outlook.
Alertdata is now projecting a 6.7%
(not 57%) annual price increase in
2008. With soaring diesel costs
squeezing barely profitable tractor
trailer off the road, shippers took
the biggest hit in May from truckers
who carry local freight. Here,
prices jumped 4.9% from a month ago
and 13.6% from the same month a year
ago. Long-distance truckload prices,
meanwhile, were up only 1.7% and
5.7% over the same month-ago,
year-ago time periods.
BASIC SPEC FOR EPA SMARTWAY
CERTIFICATION
Highway tractors
ü
Model year 2007 or later engine;
ü
Integrated cab-high roof fairing;
ü
Tractor-mounted side fairing gap
reducers;
ü
Aerodynamic bumper and mirrors;
ü
Options for reducing periods of
extended engine idling
(auxiliary power units,
generator sets, direct fired
heaters, Battery
powered HVAC
system an automatic engine
start/Stop system); and.
ü
Options for low rolling-resistance
tire (single wide or dual) mounted on aluminum wheels.
Trailers
ü
New long-haul van trailers can be
ordered-and existing trailers Can be upgraded-to
qualify as an EPA-certified SmartWay
trailer
provided
that they are equipped with:
ü
Side skirts;
ü
Weight-savings technologies;
ü
Gap reducer on the front or trailer
tails (either extenders or
boat trails); and
ü
Options for low rolling resistance
tires (single wide or dual)
mounted on aluminum wheels.
LTL Revenue Growth
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LTL Revenues Excluding
FCS* |
$562 million, 1Q-2007 |
$828 million, 1Q-2008 |
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Fuel Surcharge Revenues |
$4,673 million, 1Q-2007 |
$4,526 million, 1Q-2008 |
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Carriers Used in the
Analysis: YRC Nationals,
Yellow, Roadway,
Con-way, ABF ODFL, UPS
Freight (Overnight),
YRC Regional, Vitran,
Saia
*Using the ODFL proxy
Source: Company reports,
SJ Consulting Group
estimates |
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Nothing too
surprising
to report in the rail price outlook.
According to the latest surveys of
domestic rail companies by the U.S.
Labor Department, in May average
prices for moving freight by rail in
carloads increased 1.7% from a month
ago and 12.8% from the same month a
year ago. Prices for intermodal rail
service, meanwhile, increased a bit
faster, up 2% from a month ago and
19.3 % from the same month a year
ago. Shifting traffic from trucking
to rail and rising exports of grain
and coal have bolstered the pricing
power of railroads. The forecast
average prices for rail
transportation will rise 11% in
2008, followed by a 4.1% gain in
2009.
Railroad fuel
efficiency paying off
In 2007, major freight railroads in
the United States moved a ton of
freight an average of 436 miles on
each gallon of fuel-a 3.1 percent
improvement over 2006 and an
astonishing 85.5 percent improvement
since 1980. Thanks to fuel
efficiency gains, since 1980 freight
railroads have reduced fuel
consumption by 48 billion gallons
and carbon emissions by 538 million
tons.
“2007-436 miles/gallon,
2006-423 miles/gallon, 1980-63
miles/gallon”
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The domestic air freight industry is
rushing to keep pace with the
underlying fuel cost surge.
In May, average prices for flying
cargo and mail on scheduled flights
increased another3%, on par with the
3% monthly price hike that was
registered in April. Compared to May
2007, these air freight prices were
up 14.3%. (By comparison, the
wholesale price that domestic
refiners charged for jet fuel soared
72% from a year ago.) The forecast
for domestic air freight industry
prices has been pushed up sharply
too. Instead of a 10% annual price
increase in 2008, Alertdata is now
projecting a 15% gain. But,
historical price data is available
only as far back as 1990, so air
freight price forecasts should be
viewed cautiously.
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Shippers who move
cargo over water
are feeling the rush of inflationary
pressures too, but the price data
from U.S.-based shipping companies
haven’t been as volatile as truck
and air freight. According to Labor
Department surveys, average prices
for waterborne transportation
increased 0.2% from a month ago and
9.7% from the same month a year ago.
This leaves the forecast relatively
unchanged at 7.7% for 2008 and 3.3%
for 2009. Looking at detailed price
data, from May 2007 to May 2008
average prices were up 21.6% for
shipping on inland waterways, 9.2%
for coastal and Great Lakes shipping
and 6% for deep sea water
transportation.
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