Truck loadings rebound in April

May 30, 2012

The FTR loadings data shows that growth remains well below the levels normal for a mid-recovery period. This is a reflection of the slow growth in overall economic activity, which is also well below normal levels. After a downwardly revised drop 0f 1.0% in March, month-over-month loadings jumped 1.2% in April. This equates to movement of 58.518 million loadings in April. The year-over-year growth improved to 3.0% after nearly stalling out in March.

Recent History
Truck volumes dropped throughout 2009, bottoming out in Q4 at 157.7 million loadings. After seeing strong gains during 2010, particularly in Q2, volumes were essentially flat until an uptick in Q4, entirely due to the strong December. Since December, loadings have stabilized and maintained most of December’s gain.

Outlook
After dropping 2.1% in 2007, loadings fell 5.9% in 2008 and plummeted 11.3% in 2009. We rebounded to grow 3.3% in 2010 and 3.0% in 2011. Our outlook for 2012 remains at 3.0%, not robust but still above its historical average. Our forecasts for 2013 and 2014 are slightly reduced, up 3.5% in 2013 and 4.0% in 2014.

Year-over-year growth will stay near its current level until an improvement in the latter portion of the year. Even if there was very little growth in monthly volumes we would still see growth of ~2% for the rest of the year.

Remember that the farther we get away from the last recession, the closer we get to the next one. We don’t attempt to forecast when the market might turn down. We’ll leave that to the political prognosticators. When we start to get real indicators of such a risk we will be quick to notify our customers.

Analysis
The shape of tonnage growth in this recovery is determined by the economic leverage of trucking’s economic segments. During the early part of the recovery that leverage was strong, and freight grew well above GDP levels. Since February of 2011 that leverage fell, along with overall economic growth, and freight has been almost flat. Volumes jumped higher at the end of 2011 and most of that growth has been able to stick; however, we have yet to see a strong trend of monthly volume gains.

FTR expects freight growth to strengthen as the economy grows in the 2% range during 2012. Truck freight will grow close to 4% for the remainder of 2012 and most of 2013. That is enough growth to tighten capacity.

NOTE:
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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