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ATA Freight Forecast projects 25.6% increase in tonnage by 2030

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Ata freight forecast projects 25.6% increase in tonnage by 2030

ARLINGTON, Va. — The American Trucking Associations Wednesday released its latest ATA Freight Transportation Forecast: 2019 to 2030, an annual projection of the state of the freight economy, showing continued growth in the industry.

“America’s trucking industry, and the overall freight transportation industry, are poised to experience strong growth over the next decade as the country’s economy and population grow,” said ATA Chief Economist Bob Costello. “Our annual Freight Forecast is a valuable look at where we are headed so leaders in business and government can make important decisions about investments and policy.”

Among the findings in this year’s Freight Forecast:

  • Overall freight tonnage will grow to 20.6 billion tons in 2030, up 25.6% from 2019’s projection of 16.4 billion tons.
  • Freight industry revenues will increase 53.8% to $1.601 trillion over the next decade.
  • Trucking’s share of total freight tonnage will dip to 68.8% in 2030 from 71.1% this year, even as tonnage grows to 14.2 billion tons in 2030 from 11.7 billion tons.
  • Truckload volume will have an average annual expansion of 1.5% a year through 2024 and 2.1% for 2025-2029.
  • Less than truckload volume will have an average annual expansion of 1.8% through 2024 and 2% for 2025-2020.
  • Private carrier volume will have an average annual expansion of 1.5% percent year through 2024 and 2.2% per year for 2025-2029.
  • In 2019, truckload will handle 71.1% of truck freight volume, LTL 0.9% and private truck 35.1%
  • Trucking and total rail transportation will lose relative market share, even as revenues and tonnage grows, while intermodal rail, air and domestic waterborne transportation will show modest growth and pipeline transportation will experience explosive growth – surging 17.1% in tonnage and 8.6% in revenue over the next decade.

As with any industry, forecasts are in part based on what’s happening with the U.S. economy.

The executive summary of the Freight Forecast notes that the forecast is being released when the U.S.  economy is experiencing some volatility as uncertainties mount.

“Despite prospects for solid trend-like growth in the U.S. in 2019, investor concerns over rising risks of a downturn after 2019, stoked by developments abroad and policy concerns, resulted in sharply worsening financial conditions in late 2018.

“Helped by a dovish pivot in Federal Reserve Board monetary policy, a recovery in financial conditions is now supporting Gross Domestic Product (GDP) growth above trend. The second estimate of first-quarter 2019 U.S. GDP growth was 3.1%, up from 2.2% in the fourth quarter of 2018 and in line with the strong 2.9% economic growth for 2018. The healthy economy in 2018 resulted in a very strong freight market for the year.

“The robust first-quarter pace of 2019 economic growth is expected to be temporary, as it was driven by two sources of strength that could easily reverse later this year: inventory investment and net exports. Both components are volatile and rarely indicative of underlying momentum in the economy.

“Real 2019 GDP growth is expected to moderate beginning in the second quarter, and we look for a 2.7% increase for calendar year 2019. We predict annual real GDP growth will slow further to 2.1% in 2020 and 1.8% in 2021, with implications for slower growth in freight transportation demand.

“Freight Forecast clearly lays out why meeting challenges like infrastructure and workforce development are so critical to our industry’s success,” said ATA President and CEO Chris Spear. “It belongs on the desk of every decision maker in our industry and in the supply chain.”

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ATA truck tonnage index rose 0.1% in January, 0.8% higher than January 2019

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Ata truck tonnage index rose 0.1% in january, 0.8% higher than january 2019
Trucking serves as a barometer of the U.S. economy, representing 71.4% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. (iStock photo)

ARLINGTON, Va. – American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index rose 0.1% in January after rising 0.5% in December. In January the index equaled 117.4 (2015=100), compared with 117.3 in December.

ATA recently revised the seasonally adjusted index back five years as part of its annual revision.

“Over the last two months the tonnage index has increased 0.6%, which is obviously good news,” said Bob Costello, ATA chief economist.

“However, after our annual revision, it is clear that tonnage peaked in July 2019 and, even with the recent gains, is down 1.8% since then,” he continued. “Softness in manufacturing and elevated inventories continue to weigh in on the truck-freight tonnage.”

Compared with January 2019, the SA index rose 0.8%, which was preceded by a 3.1% year-over-year gain in December. In 2019 the index was 3.3% above 2018.

The not-seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 114.6 in January, 1.1% above the December level (113.3). In calculating the index, 100 represents 2015. (Note: ATA’s tonnage data is dominated by contract freight.)

Trucking serves as a barometer of the U.S. economy, representing 71.4% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 11.49 billion tons of freight in 2018. Motor carriers collected $796.7 billion, or 80.3%, of total revenue earned by all transport modes.

ATA calculates the tonnage index based on surveys from its membership, and has been doing so since the 1970s. This is a preliminary figure and is subject to change in the final report issued around the fifth day of each month. The report includes month-to-month and year-over-year results, relevant economic comparisons and key financial indicators.

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The Trucker Newspaper – February 15, 2020 – Digital Edition

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Fleet Focus: ELDs push drivers to find ways to remain ‘productive’

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trucks and cars in traffic
Prior to ELDs, two hours stuck in traffic went down as a half-hour driving and an hour-and-a-half break at the truck stop, or the start time was simply adjusted to show beginning the trip much later. (The Trucker File Photo)

The crescendo has passed, but the symphony of protest against electronic logging devices (ELDs) is far from over. Despite the objections and barring a legislative turnaround of epic proportions, ELDs are here to stay.

Whether the claims of enhanced safety provided by ELDs prove true, and so far they have not, carriers have a vital interest in protection against the “nuclear” verdicts being handed down in courtrooms. With paper logs, they had less control over the driver’s actions. Hours of Service infractions and falsifications that could potentially seal a verdict against the carrier might not be discovered until weeks afterward, when the logs were sent in. And, if the driver was good enough at “creative” logging, those infractions might not be discovered at all.

Full disclosure: during a driving career, the writer may or may not be responsible for years of near-perfect duty status records that may or may not have been routinely (and beautifully) falsified.

For most drivers, and especially owner-operators, it was important to “preserve” as many driving hours as possible in order to be productive (and profitable). So, two hours stuck in traffic went down as a half-hour driving and an hour-and-a-half break at the truck stop, or, the start time was simply adjusted to show beginning the trip much later. Recorded driving hours were calculated by dividing miles traveled by a reasonable “average” speed, usually five or so miles below the posted speed limit — but only when the result was fewer hours than actually spent driving that distance. Daily hours didn’t start until the truck was nearly loaded, foregoing the short drive from the truck stop and hours of waiting.

ELDs have greatly reduced infractions and falsifications, and made it easier for
carriers to identify those that still occur much sooner. Some will say that ELDs can still be falsified, but it’s also easier for both carriers and law enforcement to monitor.

What has happened is that ELDs have brought to the surface something that drivers have known for decades — industry abuse of the driver’s working time has been rampant and mostly ignored. It’s amazing how many carriers suddenly became concerned about driver “productivity” when ELDs made it more difficult for drivers to “hide” non-productive hours. Dispatchers are no longer able to give wink-and-nod direction to “just do the best you can,” trusting
the driver to make the paper logs look right.

With ELDs in place, drivers and owner-operators need to find other ways to remain productive. That action might include becoming much more assertive when it comes to control of those available hours.

Refusing dispatch, for example, is a legal descriptor of being an independent owner or contractor. Drivers should consider more than just miles and compensation rates when a load is offered. For example, loads traveling shorter distances are often less productive, especially when there’s a pickup and a delivery on the same day. The rate per mile offered should be greater than for longer loads.

Potential traffic should be considered, too. A pickup scheduled for 8 a.m. in the center of a large metropolitan area virtually guarantees waiting in traffic congestion, whereas a pickup in a suburb, or in a smaller city, might get the driver in and out much faster.

Customers who routinely take excessive amounts of time to load or unload can and should be avoided. Even if the customer or carrier pays for detention time, the amount is often far less than the driver earns during hours spent driving down the highway.

In a world where compensation is usually calculated by the mile, drivers are often unaware of how their settlements equate to hourly pay. They shouldn’t be. Owners should keep a record of the total time spent on a load as well as compensation received. A load with 10 hours of driving that is loaded in an hour and unloaded in an hour means 12 hours invested. Make it four hours to load and four more to unload, and the time investment becomes 20 hours. Divide the revenue received by the time spent (12 hours or 20) and the resulting earnings per hour may differ greatly. The answer may be good to know the next time that load is offered.

Managing a trucking business, even a one-truck outfit, is often a series of trade-offs. Owners must sometimes accept a not-so-good load to get in position for a better one or to get to needed maintenance (or a visit home). Even so, every load offered should be examined for its productivity potential.

The impact of ELDs on productivity is real. Owners of small trucking businesses can minimize that impact by considering potential productivity on every load offered and by exercising the power of NO when necessary.

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