Flatbed rebounded 1.7% in April

As expected Flatbed loadings had a strong rebound in April. Flatbed continues to be the star of this recovery. Flatbed loadings were at 7.452 million in April, a jump of 1.7% from March. Year-over-year growth accelerated, up 4.8% in April after growing just 2.6% in March. The only other trailer segment able to match Flatbed’s growth is the Bulk/Dump market.

Recent history
Flatbed freight was the hardest hit sector during the Great Recession. As manufacturing and housing both toppled, flatbed loadings dropped 19.2% in 2009 alone. And this was on the heels of a 4.2% decline in 2008. Volumes dropped significantly from Q3 of 2008 through Q2 of 2009. Loadings were flat until the start of 2010 and then they rose strongly for the next four quarters. 2011 started off weak but loadings have been mostly rising since then. Year-over-year growth went near zero in October and November, but quickly got back near 5% by the end of 2011 and has generally stayed there.

Outlook
After growth of 5.9% in 2010, loadings growth accelerated in 2011 to 7.0%. Growth will stay strong but ease back to 5.3% in 2012 and then re-accelerate to 6.9% in 2013 and 6.7% in 2014. Freight volumes are still below their pre-recession peak. However, the strong growth starting in 2010 and forecast through 2014 means that we are now likely to get to a new peak by late 2013.

The main concern for this segment is that changes in the economic climate are likely to impact it more than other markets. If the economy stalls then business investment would likely be heavily reduced. The strong manufacturing sector, and the business investment necessary for that, have driven much of the rebound in this sector. If that investment stalls, then this sector will likely be disproportionately affected. Conversely, if housing and construction improve quicker than anticipated it would have a very positive impact on flatbed demand.

Analysis
There were no major changes to our outlook this month. Flatbed continues to be the star of this recovery. The beginning recovery in housing and the strong auto market should accelerate Flatbed growth in 2012, with an upside quite possible.

Monthly growth is still expected to lead all truck types. Continued expansion of autos and housing provide an upside opportunity. Up to this point Flatbed loadings growth has lead this trucking recovery even without normal auto and housing markets.  With the prospects improving for both of those sectors in 2012 we see strong upside potential for this segment. Good auto demand should bolster steel shipments and lumber should respond to the modest housing recovery (the railroads have already been showing strong movements of forest and lumber products). The strong manufacturing and energy sectors have created strong opportunities, especially considering the amount that this fleet was downsized during the recession.

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.