[Cam]

That's seven months in a row that have been better than 2006/2007 (year over year), the first month that was better than the previous, seasonally adjusted (month to month). And yet, oil hit...$142...!!!

Trucking news: ATA says seasonally-adjusted tonnage index inches up
Despite increase, industry still facing tough market conditions

Jeff Berman, Group News Editor -- Logistics Management, 6/27/2008

ARLINGTON, Va.—The American Trucking Associations (ATA) said that its seasonally-adjusted for-hire Truck Tonnage Index was up 0.5 percent in May after dropping 0.6 percent in March (March’s index was initially reported as dropping 1.1 percent by the ATA).


This marks the first tonnage increase on a month-to-to-month basis since January, according to the ATA


May’s seasonally-adjusted index was 114.8 (2000=100), and the not seasonally-adjusted index was up 1.1 percent to 118.3. The ATA said that the seasonally-adjusted index was up 3.3 percent compared to May 2007, representing the seventh straight year-over-year monthly increase. April’s year-over-year gain was 2.2 percent, stated the ATA.


Even though tonnage showed positive growth, it is clear that the trucking industry continues to feel the effects of increasing diesel prices, slow consumer spending and retailer performance, and general economic malaise.


“The fact that tonnage increased on a month-to-month basis for the first time in four months, as well as achieving its largest year-over-year gain since February of this year, is quite positive,” said ATA Chief Economist Bob Costello in a statement. “However, year-over-year comparisons continue to reflect the weakness of 2007 rather than robust growth in 2008.”


And in a May interview with LM, Costello said that at this point, rapidly rising fuel prices are a bigger problem for the motor carrier industry than freight volumes.


“Surging fuel prices are weighing heavily on consumers too; and since trucks haul virtually all consumer goods at some point in the supply chain, the industry is being significantly impacted both directly through higher diesel prices and indirectly as consumers pay more for gasoline and have less money to spend on truck-transported goods,” said Costello.


Trucking serves as a barometer of the U.S. economy, because it represents nearly 70 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods, according to the ATA. The ATA notes that it hauled 10.7 tons of freight in 2006, and that motor carriers collected $645.6 billion—or 83.8 percent—of total revenue earned by all transport modes.

http://www.logisticsmgmt.com/article...dustryid=48465

[Rev.Vassago]

Just wait until the bottom falls out of the oil market. Things are certainly going to get very interesting very fast. :lol: It should make for an interesting Christmas this year.

[Cam]

Originally Posted by Rev.Vassago

Just wait until the bottom falls out of the oil market. Things are certainly going to get very interesting very fast. :lol: It should make for an interesting Christmas this year.

What do you mean, do you think this is a pregnant price bubble?

[Rev.Vassago]

Originally Posted by Cam

What do you mean, do you think this is a pregnant price bubble?

Absolutely. The due date is the third quarter of this year (which is just ending), which means they may have to go in cesarean. :lol:

[Cam]

Originally Posted by Rev.Vassago

Absolutely. The due date is the third quarter of this year (which is just ending), which means they may have to go in cesarean. :lol:

Works for me! I don't know how much of this credit bubble has played out, but I can't see how sustained fuel prices this high wouldn't cause a dramatic slow down.

[GMAN]

Artificially inflated pricing, such as what we are seeing in the oil market, have a life cycle. I am not sure where Rev gets his 3rd quarter estimate, but it may not be too far off. I have no idea of when this bubble will burst, but at some point it will. When it does, fortunes will be lost overnight. Those who make money on the way up get rich. Those who jump in when it is at the peak usually lose their shirts. The trick is in knowing where the apex lies and to get out before it reaches that point. Greed will destroy many of these investors. Some will enter the market late or stay in too long. For speculators to make money someone will need to lose money. That is the way it works.

[Rev.Vassago]

Originally Posted by GMAN

Artificially inflated pricing, such as what we are seeing in the oil market, have a life cycle. I am not sure where Rev gets his 3rd quarter estimate, but it may not be too far off.

I'm getting it from several Fortune 500 trucking companies, all of whom were predicting a third quarter turnaround.

I have no idea of when this bubble will burst, but at some point it will. When it does, fortunes will be lost overnight. Those who make money on the way up get rich. Those who jump in when it is at the peak usually lose their shirts. The trick is in knowing where the apex lies and to get out before it reaches that point. Greed will destroy many of these investors. Some will enter the market late or stay in too long. For speculators to make money someone will need to lose money. That is the way it works.

Dot Com boom and bust all over again. Amazing how history repeats itself, isn't it? :wink:

[GMAN]

I am not sure we will see a turnaround during the 3rd quarter. These carriers have stockholders to keep at bay. It is in their best interest to keep things upbeat. I hope these people are right. Personally, I think things will be difficult through much of next near. I hope that I am wrong. The key will be in how fuel prices react. If prices remain the same or continue to climb, then the economy will stay sluggish or slow further. If prices drop dramatically then we could see some improvement in the economy. Tonnage is up by a small percentage. That doesn't necessarily mean that the economy is doing better. It only means that tonnage is up. When profits are up then I believe you can say things are better. 8)

[BigDiesel]

We are very close to the oil bubble going blammo.... The Saudis know it and they are nervous. Watch what happens after the Olympics.... JMO

[GMAN]

I am glad to hear the Saudi's are nervous. They should be nervous. If we started actively drilling and found some large reserves, their profits would go into the toilet. The free market hasn't been in play in the oil market for more than 30 years. Prices have been artificially controlled by OPEC, which is an oil monopoly. A monopoly is illegal in this country, but not in other parts of the world.