Home » Posts tagged 'trucking' (Page 2)

Tag Archives: trucking

What Collapsing Orders for Heavy Trucks – Down 71% from a Year Ago – Say about the U-Turn in Trucking

June 6, 2019

What Collapsing Orders for Heavy Trucks – Down 71% from a Year Ago – Say about the U-Turn in Trucking

“When times are tough, the thinking switches to the short-term. Many fleets are just fighting for survival.”

Orders for Class-8 trucks – the heavy trucks that haul a large part of the goods-based economy across the US – plunged by 71% in May compared to May last year, to — as FTR Transportation Intelligence called it this afternoon — a “chilly 10,400” orders. It was “the lowest volume for Class 8 orders since July 2016 and the weakest month of May since 2009,” FTR said in the statement (data via FTR):

This comes after orders had already plunged year-over-year by 52% in April, 67% in March, 58% in February and January, and 43% in December. It was the seventh month in a row of year-over-year declines (data via FTR):

The cyclical nature of the industry is legendary. Trucking companies get exuberant when capacity tightens and freight rates soar – which they did in late 2017, that in 2018 turned into an outright capacity shortage and a driver shortage.

This boom was fueled in part by a decision in Corporate America to build up inventories in the US to front-run potential import tariffs. This put additional pressure on trucking capacity, and on freight rates. And it motivated trucking companies to order new equipment to meet demand. Given the capacity pressure at the time, they tried to get the orders in ahead of the others, and this created a phenomenal boom in orders — and at truck manufacturers, historic order backlogs.

Then the other part of the cycle begins. As these new trucks enter service, capacity rises, taking pressure of the system. This was expected.

…click on the above link to read the rest of the article…

Grocery stores would run out of food in 3 days if long-haul truckers stopped working

January 14, 2019

Grocery stores would run out of food in 3 days if long-haul truckers stopped working

soda supermarket grocery store — Your favorite products wouldn’t be available for too long if truckers stopped working.

Trucking moves 71% of the freight in the United States.
Most of the basic functions of society wouldn’t be effective if truckers were to stop working.
And naturally, your Amazon Prime packages would be delayed.

Trucking moves 71% of the freight in the United States. And if it were to suddenly cease, the effects would be more drastic than you might expect.

In May 2018, truck drivers in Brazil went on strike for a week, and it “paralyzed” the country in unexpected ways. As gas stations ran out of fuel, for instance, public transit halted.

“Without trucking, we would be naked, starving, and homeless,” Mike Robbins, a longtime trucker and leader of trucker strike group Black Smoke Matters, told Business Insider.

A study by the American Trucking Associations outlined what would happen if truckers were to stop working. The effects would hit hospitals, gas stations, ATMs, grocery stores, and even your garbage can.

And, of course, your Amazon Prime packages would be delayed.

Within the first day

Basic medical supplies, like syringes and catheters, would be at risk of running out. Medication for cancer patients that use radiopharmacuticals, which only have a life span of a few hours, would expire.

During the 2018 truck strike in Brazil, a lack of medical supplies was a key choke point for the country. Government security forces escorted trucks with supplies to hospitals and doubled fines against striking truckers who were carrying medical cargo.

Mail and package delivery could stop if drivers in last-mile, as well as long-haul truck drivers, were to stop working.

…click on the above link to read the rest of the article…

What Truckers & Railroads Are Saying About the US Economy

October 20, 2018

What Truckers & Railroads Are Saying About the US Economy

They’re a measure of the goods-based economy.

Freight shipment volume across all modes of transportation – truck, rail, air, and barge – rose 8.2% in September, compared to a year earlier, according to the Cass Freight Index. While this is still a big jump, it’s down from the five double-digit increases earlier this year. The index covers merchandise for the consumer and industrial economy but does not include bulk commodities, such as grains or chemicals.

The chart below shows how the index changed from the same month a year earlier. Note the notorious cyclicality of the business, the peak increase in January of 12.5%, and the trend since then. Growth in shipments continues to be strong, indicating a strong goods-based economy, but that growth is leveling off somewhat:

This blistering boom in early 2018 may have run its course, with growth in shipments still strong, but showing the first signs of leveling off. At the same time, trucking capacity-constraints, while still an issue, are abating.

Root of Tooth Sensitivity

by Sensodyne®

The DAT Dry Van Barometer, cited in the Cass report, tracks demand for van trailers compared to available capacity. It highlights the cyclicality in the business, including the “transportation recession” in 2015 and 2016. The horizontal blue line (50) indicates equilibrium between demand for vans and capacity. Values above the line indicate demand exceeds capacity. Demand-capacity imbalances drive pricing power (click to enlarge):

Demand from the industrial sector shows up in demand for flatbed trailers that haul equipment and supplies for manufacturing, oil-and-gas drilling, construction, etc. As demand for flatbed trailers surged late last year capacity suddenly tightened in January in part due to the required use of Electronic Logging Devices (ELDs), and the DAT Flatbed Monthly Barometer, cited by Cass, spiked to historic highs. But the demand-capacity imbalances are now abating (click to enlarge):

…click on the above link to read the rest of the article…

What’s Going On with Trucking and Rail?

June 18, 2018

What’s Going On with Trucking and Rail?

Everything is spiking, setting off “inflationary concerns.”

When consumer products companies, retailers, oil-and-gas drillers, manufacturers, and other companies complain that shipping goods within the US is confronting them with soaring costs, capacity constraints, and delays, they’re not making this up. Trucking companies and railroads – an infamously cyclical industry that suffered through the “transportation recession” from 2015 through much of 2016 – are jacking up their prices with gusto.

The total amount that shippers spent on freight by truck, rail, barge, and air is skyrocketing, according to the Cass Freight Expenditure Index, which tracks the amounts spent by shippers on all modes of transportation. This spending is a function of price and volume. In May, soaring prices and shipping volume pushed spending up by 17.3% compared to a year ago, the 8th double-digit year-over-year increase in a row:

“May’s 17.3% increase clearly signals that capacity is tight, demand is strong, and shippers are willing to pay up for services to get goods delivered in all major modes throughout the transportation industry,” the Cass report said.

Top 5 Challenges Facing Small Business Owners

by Royal Bank of Canada

And the rising price of fuel and the related fuel surcharges added to the amounts spent: the price of diesel was up 27% at the end of May from a year ago.

The Cass Truckload Linehaul Index, which tracks per-mile full-truckload pricing but does not include fuel or fuel surcharges and is not impacted by rising diesel prices, jumped 9.0% in May compared to a year ago, the largest year-over-year increase in the data going back to 2005. And “the strength is continuing to accelerate,” Cass said in its Linehaul report:

…click on the above link to read the rest of the article…

In Just 5 Days Without Trucks, Chaos Would Erupt in America

November 9, 2017

In Just 5 Days Without Trucks, Chaos Would Erupt in America

Have you ever thought about how fast things could go sideways in America? What if we went 5 days without trucks moving supplies across the country? Have you considered how JUST ONE THING could change the world as we know it?

The video below has been around for several years, but if you haven’t seen it in a while, it is worth watching again.

Think for a moment about what would happen if the trucks stopped running. The trucking industry is the lifeblood of this country, and according to this, it would only take 5 days without trucks for all hell to break loose.

Watch.

In only 5 days without trucks, everything would change.

In only five days, with only one component of our economy missing, we could be without medication, food, gasoline, and sanitation. We would be unable to travel great distances easily, as airports would close.

Think about it:

No toilet paper.
No laundry detergent.
No fresh fruits and vegetables.
No fresh milk.
No garbage trucks picking up waste and no way to get to the dump.
The banks would close.
No parts would be available for things that need repair.
We couldn’t refill prescription medications.
No gasoline would be available.

Panic would erupt.

It’s that easy for all hell to break loose. Five days without the regular delivery of supplies and our country could devolve into chaos. And if it was longer than 5 days without trucks, the initial panic would be a G-rated movie compared to what would come next.

We live in a just-in-time society.

Most retail stores no longer stock up on food but have a “just in time” ordering system that relies on regular shipments.

…click on the above link to read the rest of the article…

Deep “Freight Recession” Hits Railroads, Trucking, Air Freight

January 22, 2016

Deep “Freight Recession” Hits Railroads, Trucking, Air Freight

“Consumers just don’t seem to be showing up….”

As much as we would have liked to, the Dow Transportation Average wasn’t kidding. It has plunged 27% since its high on December 5, 2014. Nearly two-thirds of that plunge came over the past two months. Transportation companies are singing the blues. Railroads, trucking, air freight….

Union Pacific, the largest US railroad, reported awful fourth-quarter earnings Thursday evening. Operating revenues plummeted 15% year over year, and net income dropped 22%.

It was broad-based: The only category where revenues rose was automotive (+1%). Otherwise, revenues fell: Chemicals (-7%), Agricultural Products (-12%), Intermodal containers (-14%), Industrial Products (-23%), and Coal (-31%). Shipment of crude plunged 42%.

So Union Pacific did what American companies do best: it laid off 3,900 people last year.

This is what CEO Lance Fritz told Reuters about the American consumer: “What’s causing us some concern is it’s hard to figure out where the consumer is at.”

Consumers were sending mixed signals. Spending is shifting from retail of goods toward services. People were buying automobiles, and auto shipments rose in the quarter. And unemployment numbers looked good, he said, but labor participation “is lackluster and consumers just don’t seem to be showing up to purchase goods and services.”

And another disappointment about consumer behavior, according to Fritz: “There was a widespread belief that consumers would turn the savings from low fuel into spending, and we haven’t seen that so much.”

Canadian Pacific, which is trying to buy US rival Norfolk Southern in a deal that is vigorously contested by other railroads, reported a 4% drop in fourth-quarter revenues and a 29% drop in net income. Among its biggest decliners: crude-oil shipments (-17%) and consumer-products shipments (-24%). It garnished the report with an announcement of up to 1,000 layoffs.

CSX, in its earnings release earlier in January, reported a revenue decline of 7% for the year.

…click on the above link to read the rest of the article…

When Trucks Stop Running, So Does Civilization. Energy and the Future of Transportation.

January 19, 2016

When Trucks Stop Running, So Does Civilization. Energy and the Future of Transportation.

Also see: When Trucks Stop Running: Table of Contents, Preface, References

Virtually everything in our homes, everything in our stores, got there on a truck. Prior to that, 90 percent of those items were transported on a ship and/or a train. If trucks, trains, and ships stopped running, our global economy and way of life would stop too.

The impact of peak oil on commercial transportation has been of great interest to me after a 22-year career at American President Lines, where I developed computer systems to keep cargo seamlessly moving around the globe and just-in-time between ships, rail, trucks, and customers.

So I was thrilled when Charles Hall invited me to write a book on energy and transportation for his Springer Energy series, a book that has just been published: When Trucks Stop Running: Energy and the Future of Transportation.

Ships, trucks, and trains are the backbone of civilization, hauling the goods that fulfill our every need and desire. Their powerful, highly-efficient diesel combustion engines are exquisitely fine-tuned to burn petroleum-based diesel fuel. These engines and the fuels that fire them have been among the most transformative yet disruptive technologies on the planet. This is a dependency we take for granted.

Since oil reserves are finite, one day supplies will be diminished to where the cost of moving freight and goods with our present oil-fueled fleet will not pencil out. We have an oil glut in 2016 and a corresponding lack of urgency. Yet, inevitably the day will come when oil supplies decline. What will we do? What are our options? That is the sobering reality my book explores.

Consider just how dependent we are on abundant and affordable oil, which fuels commercial transportation: Grocery stores, service stations, hospitals, pharmacies, restaurants, construction sites, manufacturers, and many other businesses receive several deliveries a day.

…click on the above link to read the rest of the article…

And Now Trucking Is Suddenly Slowing Down

October 28, 2015

And Now Trucking Is Suddenly Slowing Down

This comes at the totally wrong time. Trucking had been booming. 2014 had been a banner year. Capacity was squeezed, and rates were rising, so trucking companies went on a buying binge, ordering everything in the book in preparation for red-hot demand in 2015 and more banner years down the road. But then came 2015.

Among businesses, over-ordering and tepid sales caused inventories to rise and the inventory-to-sales ratio to spike to Financial Crisis proportions. And now businesses are trying to bring them down by trimming orders because they’re having trouble selling more to the middle class, the over-indebted modern proletariat whose stagnant incomes are being eaten up by skyrocketing costs of housing, healthcare, college, and the like – and they simply can’t spend that much on shippable items.

And now this is ricocheting through the industry.

Monday after hours, the largest US truckload carrier, Swift, announced earnings. And on Tuesday, it clarified the debacle. It’s suffering from indigestion. The high costs from its red-hot capacity increase – average truck count jumped by 831 trucks in the third quarter from a year earlier – are now slamming into swooning freight demand.

Operating revenue declined 1%, which Swift blamed on the disappearing fuel surcharge, though it didn’t explain why it is getting away with still charging $109 million in fuel surcharges when diesel prices have plunged to rock-bottom.

So it’s cutting back. In its pervious disclosure, it announced that its average truck count for 2015 would grow by 700-1,100 trucks. Now it cut the growth down to 500-600 trucks, “given that the freight environment is softer than we originally expected, and peak volumes have not yet materialized as in years past,” it said.

September is the beginning of the holiday shipping season. Volume should be sharply higher. But it’s not happening [read… US Freight Shipments Have Worst September since 2010].

…click on the above link to read the rest of the article…

Tag Archives: trucking

Content

Post categories

Economic Links

Energy/Resource Links

Environmental Links

Geopolitical Links

Liberty Links

News Links

Other Links

Survival Skills

Post Archives by Category

Post navigation

Latest Posts