Bulk/dump loadings drop in January
March 1, 2012
While the slowly recovering construction market bodes well for bulk loadings, be wary of the later 2011 and early 2012 growth rates. This year’s numbers are skewed by the warm winter. The market has yet to prove that it will sustain such above average growth into the spring. Bulk/Dump loadings dropped 3.0% in January after a huge 6.3% surge in December. Year-over-year growth also eased, still up to 4.7% to 16.329 million loadings. Revisions to this segment were relatively minor compared to others.
Bulk/Dump freight continues to see the potential for upside growth should the glimmers of improvement in the housing sector turn into a real trend. The continued improvements in lumber shipments and housing starts maintain our hope of that. However, bulk loadings will remain well below its pre-recession level due to the struggles and generally low levels of infrastructure and housing construction. Much of this sector is aggregates used in road building and housing. This segment has been strongly affected by the fall in state infrastructure spending.
NOTE: We are continuously updating and improving our data and calculations so that we can present you the best insights and analysis available. To that end we have updated our historical data to better reflect the wide swings in economic activity that occurred during the Great Recession and the ensuing recovery. You will notice substantial changes to our data this month. To find out what those changes were and how they affect our outlook for the industry click here.
Bulk/Dump had a near monumental collapse of 25% in volumes from peak to trough. After suffering such a huge decline it has yet to make up more than a quarter of that lost freight volume fully 2 years into the recovery. Bulk/Dump freight was the second hardest hit sector, faring only slightly better than Flatbed. With construction and housing both freezing up, Bulk/Dump loadings dropped 13.8% in 2009. Volumes had already declined 9.4% in 2008 and 4.2% in 2007. Volumes dropped throughout 2008 and 2009 with the biggest quarterly drop occurring in Q1 of 2009. Loadings surged in early 2010, but then didn’t move much until the second half of 2011. Loadings rose 2.6% in 2010 and 3.9% in 2011. Since it does not have nearly the manufacturing component that the Flatbed segment does, the growth in Bulk/Dump has been more modest so far in this recovery.
This segment remains well below its previous peak, and it won’t reach it for several years – probably not until after the next economic cycle – it would need a huge housing and government infrastructure boost for it to occur sooner. After a modest gain of 2.6% in 2010 and a further 3.9% in 2011, we are forecasting that loadings growth will accelerate further in 2012, up 5.8%, before settling into growth right at 4% for 2013 and 2014.
Compared to most markets, this segment likely has very little downside exposure. While it would fall some during a recession it still remains near its trough and the housing and infrastructure segments are unlikely to contract in a significant way.
REVISED DATA: 2009 changed from a decline of 16.8% to -13.8%. 2010 changed from a big gain of 7.9% to a modest 2.6%. 2011 growth moved higher from 2.7% to 3.9%.
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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