Refrigerated loadings end 2011 with big gain
January 26, 2012
A strong finish to 2011 improves the outlook for 2012. Refrigerated loadings surged 1.5% in December to 4.270 million. Prior months were revised significantly lower, however, the strong finish in December lets 2012 start the year off nicely. December’s year-over-year gain of 2.5% is the best showing since September 2010.
Freight volumes fell 5.1% in 2009 after growing 4.3% in 2008 – one of the only sectors to show growth in 2008. The revised freight loadings for 2010 shows a substantially different picture than was previously expected. 2010 loadings changed from growth of just 1.4% to a huge surge of 8.7%. This is a very dramatic swing and is well outside of the usual modest growth seen in the refrigerated market. Growth was non-existent in 2011, dropping 0.3%. The very strong growth in early 2010 skews the comparison because 2011 actually showed flat or positive quarter-over-quarter growth.
After the unusual surge of 8.7% in 2010 loadings reverted back to their slow growth ways, with no growth in 2011. The outlook for 2012 has improved from last month and we look for growth of 2.8%. This is reasonable growth for this market but is below the average for the truck industry. Growth will then moderate to 2.1% in 2013 and 2.5% in 2014.
A stable market
This is a more non-cyclical market segment and generally stays within a narrow band of +/- 5%. People always have to eat. We are now at the negative portion of the refrigerated cycle where its very low cyclical pattern keeps growth well below industry averages. The same modest numbers look very good during a downturn when the other segments fall sharply.
As usual, the classically stable reefer market trails dry van growth. We continue to forecast the typical, slow upturn growth for this segment. Note, however, that a slew of new Federal food regulations expected sometime in 2012 could increase the requirements for temperature-controlled trucking.
U.S. Truck Loadings is the estimated number of truck loads originated in the United States plus truck loads that come to U.S. destinations from Mexico and Canada. It is tons divided by the average tons per truck. FTR’s data is seasonally adjusted and measures both short and long-haul OTR segments.
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