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Overdrive Staff | November 01, 2011

FREIGHT CARRIED by the for-hire transportation industry rose 0.4 percent in August from July and 4.6 percent from a year earlier, reaching the highest level since July 2008, the U.S. Department of Transportation said. Freight shipments, measured by the Freight Transportation Services Index, rose 2.9 percent in the last three months.



Demand outpacing capacity

Utilization of ready-to-drive trucks is close to the record set in the early 2000s and could hit a record in 2012, said Noel Perry, a senior consultant with FTR Associates. The situation is tight because the trucking recovery is good and because carrier management is conservative about hiring drivers and buying trucks.

“They are not adding capacity at the same rate customers are increasing freight,” he said.

In addition to needing to replace an estimated 200,000 drivers annually to cover normal turnover, the industry is several hundred thousand drivers short of raising capacity to meet demand, Perry noted.

Perry forecast 3 percent growth for trucking through 2012. That’s enough to maintain freight rates but not enough to replace business lost in the recession.

Among indicators, Perry said the Avondale Truckload Spot Market Index is showing increased spot market volatility as more freight moves to dedicated routes, where’s it’s easier to recruit drivers. For small carriers, especially start-ups that provide more spot market capacity, he said, it will be more volatile and, assuming the recovery continues, more profitable.

Perry said the recession clobbered trucking to the point that demand won’t recover to previous levels until at least 2016.

On driver pay, Perry said the increase in capacity shortage is slow enough to keep pay rates mostly stable. “The safe forecast is we’re going to get modest increases over the next six months,” he said.

— Max Kvidera



Cross-border trucking opponents meet

Leading opponents of the cross-border trucking pilot program with Mexico united for a press conference near a California border crossing Oct. 19.

The Owner-Operator Independent Drivers Association, U.S. Reps. Bob Filner and Duncan Hunter, both of California, and the Teamsters union gathered near the Otay Mesa truck inspection facility. The first Mexican carrier approved for program participation, Transportes Olympic, was expected to make its first delivery under the new program on Oct. 20.

The past two presidential administrations have made the program a priority, said Joe Kasper, a spokesman for Hunter’s office. Given that, the Republican representative’s hope is the United States will suspend the operating authority of Mexican program participants when the program expires.

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