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Overdrive Staff | March 01, 2011

Capacity shortfall forecast into 2013

A combination of the trucking industry trying to catch up with the economic recovery and adapting to government regulations that are still being developed will extend a capacity shortage through 2013, a trucking economist said at an online seminar Feb. 10.

FTR analysts foresee double-digit percentage increase in driver pay.

The shortfall will peak above 250,000 units in 2012 but continue at about 150,000 units in 2013, predicted Noel Perry, a senior consultant with FTR Associates and principal of Transportation Fundamentals. He said the industry is pursuing productivity increases through greater utilization of existing equipment, and miles per tractor were up more than 10 percent in 2010. Without that productivity improvement, “this crisis could be twice as bad, peaking at around 400,000 units,” he said.

Perry added that capacity utilization has recovered to above 90 percent, but rate increases haven’t kept pace. He said carriers are more productive and profitable, without increasing rates much. “From now on if a [carrier] wants to handle more freight, he is going to have to hire drivers and buy equipment,” he said.

Asked about the proposed hours of service changes and their impact on trucking, Perry predicted driving hours will be cut to 10 from 11. “We figure it’s going to cost the industry about 5 percent in productivity,” he said.

In response to a question, Perry projected that driver pay will increase by double digits in the second half of 2011 and continue “for at least another year.”

Perry forecast a 5 percent tonnage increase in 2011. He added that gross domestic product growth will be in the 3 percent range for the year, led by manufacturing and an improving retail market.

Larry Gross, an FTR senior consultant, said that rail and intermodal shipments were slowed during recent bad weather but will rebound in the next few months. Perry added that shipper demand will pick up and trucking also will recover from the weather slowdown.

— Max Kvidera


SHORT HAULS

JANUARY CLASS 8 truck total net orders for all major North American truck makers increased 1 percent over December to 27,009 units, according to FTR Associates. The order level is more than four times the figure in January 2010.

SPOT MARKET truckload freight movement in December increased 55 percent over a year earlier, according to TransCore’s North American Freight Index. TransCore said spot market freight volumes for the third and fourth quarters in 2010 were the highest since 2005, a peak year for spot market volume.

TRUCKING COMPANIES added 3,200 new employees on a seasonally adjusted basis in January, the U.S. Department of Labor’s Bureau of Labor Statistics reported.

FREIGHT MOVEMENT as measured by the Freight Transportation Services Index rose 1.5 percent in December from November, the U.S. Department of Transportation reports. December’s figure was 0.4 percent higher than a year earlier. In 2010, the index increased 0.4 percent.

NAFTA SURFACE TRADE between the United States and Canada and Mexico rose 15.5 percent in November 2010 over November 2009, according to the U.S. Department of Transportation.

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