Diesel Prices
National average: $2.31
Diesel prices began the year on a rebound, despite an 8 percent fall in the price of light, sweet crude for February delivery. The price of fuel was a dollar lower than it was a year ago.
INCOME
Owner-operators logged fewer miles but earned higher revenues in the third quarter compared to a year ago, especially in flatbed and reefer. Net income per mile increased across segments year-to-year, especially in flatbed, which rose 12 cents, according to Denver-based owner-operator financial services firm ATBS.
Freight demand wavering
The American Trucking Associations’ For-Hire Truck Tonnage Index dropped 6.3 percent between July and October, making it the fourth largest decrease in more than eight years. A 1.7 percent jump in November, however, made it the first month-to-month increase since June 2008. “Motor carriers that have spent decades in business battling slim profit margins and ever-increasing costs during the good times are now sputtering in the face of slumping manufacturing and an outright contraction in consumer spending,” says ATA Chief Economist Bob Costello. Cass Information Systems data shows that freight fell during the second half of 2008.
BORDER TRADE
Surface transportation between the United States and North American Free Trade Agreement partners Canada and Mexico was 2.1 percent lower in October than a year earlier, reaching $72.7 billion, according to the Bureau of Transportation Statistics of the U.S. Department of Transportation. The value of trade with NAFTA partners rose 1.2 percent in October from the month before.
SPEC’ING
When it comes to choosing equipment that saves fuel, auxiliary power units are a much less common choice for owner-operators than more traditional hardware, such as aluminum wheels, according to Overdrive research. Wide single tires and automatic tire inflation systems each ranked less than 5 percent.
Fuel Prices
National average: $3.33
Owner-Operator costs
Total costs per mile for all segments jumped 6 cents from this year’s first quarter to the third quarter, driven primarily by fuel costs, according to financial services provider ATBS. Total miles, meanwhile, fell year over year for reefer haulers but rose by 195 for flatbed haulers.
Going home
An over-the-road trucker makes fewer trips home as length of haul increases.
Manufacturing Expands
Manufacturing was relatively more active in November than a year ago, when it was at a five-year low of 49.2 on the ISM index. While many economic segments are struggling, manufacturing has been boosted recently by new orders and a recovery in production. Levels above 50 indicate manufacturing is expanding.
Trucking’s freight share to grow
The American Trucking Associations predicts trucking’s share of the freight pool will remain dominate during the next decade. The projection is reported in ATA’s recent U.S. Freight Transportation Forecast to 2018, produced by Global Insight.
The forecast says trucking’s total tonnage share will inch upward to 70 percent by 2018 from 69 percent in 2006. Above-average growth in key truck commodities and trucking’s inherent flexibility and on-time delivery will remain strong.
Rail intermodal and air freight will carry more freight, although neither mode will have more than 2 percent of the total tonnage market by 2018, the report states. Ship and pipeline modes also will make strong gains.
Currently, trucking has been in a slump. ATA’s Truck Tonnage Index slid 0.3 percent in October from the previous month, to a level 2.2 percent lower than in the same period in 2006. ATA says 2007 could mark the largest annual drop since a 5.2 percent reduction in 2000.
