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There are a whole host of things impacting productivity.
US - In a wide ranging, presentation at the recent NASSTRAC (National Shippers Strategic Transportation Council) Shippers Conference and Transportation Expo in Orlando, Fla., Bob Costello, chief economist at theAmerican Trucking Associations, provided both a general assessment of the over all economic outlook, as well as an outlook specifically focused on the freight, or, trucking economy. (This piece covered his take on the general economy, with some freight takeaways mixed in, while today’s piece will focus more on things as they relate to trucking.)
Costello said that whether one is a shipper or a carrier, it is plain to see capacity has loosened, adding that it in sync with a slowdown of Class 8 tractor sales. This served as a precursor to a laundry list of key general themes in the trucking sector, including:
-truck freight volumes weakened considerably throughout 2015, with 2016 growth expected to remain uneven by sector and weak through the first half of 2016;
-capacity loosened due to slower demand and more capacity, adding that the industry brought on more over-the-road capacity mostly in the form of small TLs and LTLs in 2015, but tractor counts remain well-below all-time highs. Some sectors are going to add trailers to boost tractor-to-trailer ratios, and some capacity will tighten heading into 2017 as volumes improve and the ELD (electronic logging device) mandate grows closer;
-revenue per mile grew in 2015 for contract freight but weakened throughout the year, and the spot market is very soft;
-a combination of pay hikes and oil field weakness helped a little in the short-term, but it is not a long-term trend; and
-fleets continue to see rising costs excluding fuel, with fleets using fuel savings to pay drivers more and to replace trucks and add trailers
“There are some different ways to look at things,” he said. “In 2014, there was an acceleration of freight, and in 2015 there was a deceleration of freight, including, in some cases, business contraction. Read more
Source: LOGISTICS MANAGEMENT
