Tank loadings jump in April
June 4, 2012
Tank loading has been the puzzle in this recovery. Strength in basic chemicals and drilling suggests higher growth rates than recorded. Loadings were up strong in April following a significant downward revision to the March data. April loadings were at 9.301 million, up 0.8% over the prior month. After a 1.9% drop last month, the year-over-year comparison was essentially flat in April.
Tank freight fell hard in the middle of 2008 but had a surprisingly strong uptick to end the year. Volumes then proceeded to drop for the next four quarters, bottoming out at the end of 2009. Growth was solid and steady throughout 2010 but the market weakened considerably during 2011, with a big drop in Q3. A sharp downward revision to the March data offset higher revisions to January and February. April showed a very strong rebound, but not quite back to the levels that we had in Dec-Jan-Feb.
Tank loadings fell 9.0% in 2008 and 5.8% in 2009. Volumes were nearly unchanged in 2010, up just 0.7%. 2011 wasn’t much better with loadings growing just 1.8%. Growth will remain weak for this recovery, rising just 1.0% in 2012. The outlook has been reduced as our food and chemicals forecasts have eased back. The year-over-year comparisons should improve during the latter half of 2012. Growth will remain below the 2% mark, rising 1.4% in 2013 and 1.7% in 2014.
Tank loading has been the puzzle in this recovery. Early strength in basic chemicals and drilling suggests higher growth rates than have been recorded. Part of the explanation is the weak fuels and fertilizer markets. Although the former should persist, a strong Ag planting year could contribute to stronger tank numbers.
Note that any reductions in natural gas drilling have been offset by increases in oil drilling, also using fracking. This same activity is helping the flatbed sector.
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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