Decreasing Supply Aids U.S. Transport Recovery

(Transport Intelligence – Thomas Cullen)

The American transport economy is creeping back towards growth. The American Trucking Association (ATA) ‘For-Hire Truck Tonnage Index’ climbed 0.4% in March after falling slightly in February and the highest level since November 2008. The seasonally unadjusted figures were 19.1% higher than in February. The ATA’s Chief economist Mr Bob Costello suggested that “both the demand and supply situations are steadily improving” driven in great part by re-stocking. He added that “For most fleets, freight volumes feel better than reported tonnage because the supply situation, particularly in the truckload sector, is turning quickly.”

This theory received a degree of support from Werner Enterprises, whose first quarter figures reported revenues up 8%, to $425.1m, although the trucking element of this actually declined by 1%. Operating income margin also increased on a year-on-year basis from 3.6% to 5%. Werner’s management commented that, “(the) recent improvement in the freight market can be attributed to decreasing supply than rising demand. We have observed an increase in the size and quantity of carrier failures in recent months. Gradually improving demand is also helping, and we anticipate that steady improvement will continue as we progress throughout 2010”. Read more here.