Though near-term trucking tonnage dipped in June – part of a “seesaw” pattern of freight activity over the last several months – the long-term outlook for cargoes and revenues holds nothing but promise for the industry.
According to analysis by the American Trucking Associations (ATA), some 15.18 billion tons of goods are expected to be moved by all modes this year, climbing 36.6% to 20.73 billion tons by 2028.
In the ATA Freight Transportation Forecast 2017, the trade group projects freight volumes to grow by 2.8% in 2017, rising to 3.4% annually through 2023, and then fall to 2.3% a year thereafter. In terms of just purely total truck tonnage, volumes are expected to increase to over 12.57 billion tons by 2023 and reach 13.91 billion tons in 2028.
Revenue associated with truck transport is projected to reach $719 billion in 2017, the report said; an increase of 6.4% versus 2016. By 2023, however, trucking revenues are expected to reach $988 billion, which is an increase of 5.4% per year on average.
“Over the forecast period, capacity shortfalls will develop,” noted Bob Costello, ATA’s chief economist, in a statement. “We are starting to see some selected tightness in freight handling capacity, enough to suggest that capacity expansion will be required if the modes are going to be able to handle anticipated growth.”
“While overall truck volumes will continue to rise, and trucking will remain the dominant freight mode, its share of freight tonnage will dip to 67.2% by 2028, with pipelines picking up most of the additional market share, and, to a lesser extent, rail intermodal,” he added.
Near-term, though, trucking’s freight volumes remain choppy. The ATA for-hire truck tonnage index dropped 4.3% in June, following a 6.9% gain during May, though tonnage was up 1.3% when compared to June of 2016.
Year-to-date, compared with the first half of 2016, the trade group said its tonnage index is up 1%. ATA also noted it revised its May tonnage increase upwards from 6.5% to 6.9%.
“After such a large spike in May, it was not surprising to see the index give back some of those gains in June,” Costello pointed out
“However, looking back at the second quarter as a whole, tonnage was up 0.8% over the first quarter and 1.9% over the same quarter last year, so it was a solid three month period,” he stressed.
“June’s slide does not change my belief that we will continue to see moderate, albeit at times choppy, growth in truck tonnage as the year continues,” Costello added.
Research firm Stifel Capital Markets noted in its weekly Freight Transportation update that overall trucking demand was strong until the end of the second quarter, with the flatbed sector still showing significant strength despite some moderation in recent weeks.
“The big surge in freight during the May/June time frame of this year can be attributed to a few factors, most notably the drawdown in inventories over the past few months and the bumper crop of produce coming out late in California,” the firm said in its report.