Truck tonnage still not out of whack
 

I may have found an easy way for all of us to keep up on an actual measurement of trucking volume. Word of mouth is fine, but it's also nice to know the statistics. I just googled 'truck tonnage' for 'news' and came up with this:

Again, it's not the end all, be all. But, I think it's nice to know.

Go to ttnews.com, sign up for their email subscription and you'll get the daily headlines which include that report every time it's released.

Hey, thanks no_worries, I may just do that. The first time I ever heard there was anything like a 'tonnage index' it was from you over on the OOIDA board. The only thing that got me excited this time is how easily I found it with a Google news search. Do you find it a useful indicator of what's going on and what you might expect in the coming months?

I've only found it to be accurate on the broadest level. It's somewhat useful for verifying trends on the macro level, but that's about it. Remember, it's an index of tonnage, therefore gross activity. It doesn't take capacity levels into consideration. The month-over-month reading is much more relevant than the year-over-year. Even in their release, they say that the year-over-year reading is favorable mostly due to an easy comparison last year. What's that mean? It means that last April was so lousy that it didn't take much to be better this year. What it doesn't say is that there were more trucks on the road this April than last. If I remember correctly, the number of trucks peaked in August.

Do I find it useful? Yes, in terms of helping me refine my macro view of what's happening. But, I don't find it terribly useful at the micro level, i.e., operationally. If you're trying to understand the industry, it's one piece of the puzzle. The best thing about it is that it comes out every month. It's hard to find regular data in this biz.

That's a GOOD answer. You obviously think about this stuff.

A capacity index would be good too, wouldn't it? I never thought about capacity changing that much. I know it sounds bad, but current fuel prices and conditions may do something to...drive down capacity.

Capacity is declining. Bankruptcies and closures in the first quarter hit carriers with fleets totaling approximately 40,000 trucks. The latest estimate I saw is that, between shutdowns and fleet size reductions, there will be approximately 80,000 fewer trucks on the road at the end of this summer than last (which was the peak). I can't remember exactly, but it seems that number represents about 2% of the total.

Yes, it would be handy to have somebody tracking the number of trucks on the road. ATA does so based on member data, but that info's held close to the vest. They occasionally put out industry reports but it ain't cheap...several hundred to over a thousand dollars. Usually once a year or so, there's a group that does a survey of class 8 registrations. Again, these numbers are most useful from a macro approach. Knowing the number of class 8 trucks registered won't tell you how many of those are sleeper trucks (a huge percentage aren't), or how they break down by mode (tanker, flat, etc.). But it's one more piece of the puzzle.

The regular numbers that come out that are most useful in evaluating the overall freight market are the ATA's index, the DOT freight index, the rail and intermodal index, and the quarterly reports from the truckers. Also, the quarterlies from the truck stop operators are particularly illuminating these days. In the first quarter, the volume of fuel sold by TA was down significantly (I think about 10%).

Seems to me as though an entrepeneur could develop a free website citing the sources you've described in this thread, boil the information down into useful summaries/charts, and paint an interesting picture of historical freight patterns as well as future possibilities. Revenue would primarily be in the form of advertising. Any takers? :)

If there is less trucks then fuel prices should go down since there will be less demand. The Green Peace should be happy with less trucks polluting the air.

Seems like we all win on this deal. :lol:

I wouldn't get your hopes up. On the demand side, diesel prices are being driven primarily by demand outside our borders. Everyone thinks oil companies are getting rich selling diesel to us. The fact is, we export a significant volume of diesel. That means oil companies can make more selling it to someone else than they can selling it here.

Interesting idea BigWheels. The problem is, the demographic you'd be pitching to advertisers is truckers...and we all know they're going broke :shock: :lol:

When do you have time to drive a truck!? I wish I knew half as much about the industry! :D

Sorry for the O/O who runs himself out of business, but I wonder how much upward price pressure that puts on the rates? I'm sure it's not enough to offset the downward price pressure due to a slowing economy and the huge part of the rate necessary just to offset fuel. It's all very interesting. It seems like some guys can do just fine if they can weather the storm but for the guys who are overextended and have to make a lot to keep their trucks and to maintain their family's lifestyle, it could smart pretty good.

You mean to tell me that advertisers would take a pass on making a buck off of truckers? :shock: :lol:

You have a valid point No_Worries, but some advertisers (Verizon, T-Mobile, etc.) do quite well catering to truckers.

As with any heavily cyclical industry, the ones that survive the periodic purge will be in the sweet spot for awhile. As for how often I drive...not as often as I should :lol:

BW, I was only joking; there certainly are companies willing to pay to advertise to truckers. There several people out there (I won't name names) giving supposed expert analysis on the industry. Their credentials are pretty sparse and they simply give their take on publicly available data. I don't put much credence in what they say but apparently some do. Tell you what, you start a website, I'll contribute some ramblings :wink:

So, when it comes to all the grief and terror we may be hearing about in the months ahead, perhaps it's possible to miss out on a lot of it just by positioning yourself to wait it out. Indeed, some guys won't make adjustments but will go full steam ahead counting on things to be as they've always been, but of course they won't. Their bankrupcies and sorrows needn't be shared by everyone if we'll pay attention to not be one of the ones who washes out. I don't mean to sound gloomy, I'm just thinking about what it'll take to be in this business all the way to the time when fuel prices stabilize and the economy adjusts to those prices, whatever they may be. Freight volume will most certainly be lower, but the capacity should be lower too.

I think we've seen the worst in terms of freight volumes. Gross volumes seem to have stabilized and relative volumes have started to improve due to the shrinking of capacity.

The issues the industry faces from here on out will be primarily financial. We've had the credit crunch, that has crimped the ability of the undercapitalized to finance continuing operations. That could be huge issue for many because I believe we still have a recession to deal with. Assuming freight remains stable, the biggest issue presented by an economic slowdown is getting paid. As shippers start to feel the crunch, days to pay get longer. Because many brokers are undercapitalized the time it takes them to pay carriers gets longer...many brokers will go under because they just can't afford the float. Any carrier that doesn't do his due diligence might find a check or two missing. Combine that with the high fuel cost and things will be tight financially.

Carriers that have their financial house in order will be fine. They can afford to absorb the occasional slow- or no-pay and don't have to rely on credit to get through. That and fuel prices will be the two major issues coming up.

There is some indication that pricing power is starting to swing back our direction. I just saw where Wal-Mart is putting many of it's contracts out for bid early. As on exec noted in the article, WM is pretty good about keeping a tight reign on their costs. The fact that they're making this move now might indicate that they think it's a good time to lock-in transportation rates.

I'm trying to fit this together. On the one hand you think we've seen the worst of the freight slow down, but on the other hand you see two of the greatest threats to freight volume yet to run their course- a lack of money available for borrowing and fuel prices.

It's hard for me to imagine these fuel prices not slowing things down dramatically. I think people are still doing things based on habit and that people haven't really adjusted their behaviors for the new economic realities (a Honda Accord gets 10mpg more than an SUV, the cost of driving to McDonalds can be as much as the food, prices on everything will have to rise...) As people start staying home more and buying less due to increase production and transportation costs, it seems it'll cause the amount of semi trailer loads of everything to fall off dramatically. I'm putting things in my own words instead of using jargon to make sure I really understand what I'm talking about.

I was speaking to constricting credit and fuel prices as operating factors for carriers, not to their impact on the consumer. Consumer spending has been slowing for a few quarters already. I don't think it has that much further to drop. Much of the freight recession was caused by the housing crash. While home sales/prices still have a ways to go, construction has about bottomed. Now, if the rest of the world tanks before we start to pull out, then all bets are off. But for right now, exports are helping to make up for weakening domestic demand.

The bottom line is that freight volumes lead the general economy by anywhere from 6 to 18 months. This is due to cyclical spending patterns of consumers and corporations and the nature of inventory fluctuations. Many times, freight is often well on its way to recovery before the economy starts to head into recession.

Bear in mind, economics is based mostly on patterns that have developed over time. As Solo like to say, there are exceptions to every rule :lol:

I've thought about it. 'Course I'd need a grant for the 1st year...say $100K. Know anybody? :lol:

I am not sure the worst is yet to come. I hate to be a pessimist, but there are still plenty owner operators and carriers who will fall by the wayside during the coming year. I believe things will be difficult into next year. There is freight available, but fewer carriers willing to haul for the cheaper rates. There are still many who continue to try to haul for fuel money just to keep going. If you have high debt and are running for low rates, you will have a much more difficult time than those with low debt and good rates. Freight is lagging in some segments due to shippers holding back product in anticipation of owner operators and carriers willing to haul for lower rates to keep going. At some point these shippers will need to move their products to keep afloat.

Carriers and owner operators will need to sharpen their negotiating skills during this time. I believe the economy will continue to limp along until next year. I hope that I am wrong. A sharp reduction in fuel prices will certainly help to stimulate things. Banks and investors made huge mistakes when they made so many marginal loans. Now they want the government to bail them out. I think they need to suffer the consequences of their poor decision making. So much of our economy revolved around construction. When construction is down, then much of the economy also suffers.

Don't get too discouraged. This is merely a regular economic cycle that we go through. Today it is fuel. At other times, it has been something else. Just keep on plugging away and pay down as much debt as possible and you will be able to weather this downturn. Stay away from loads which are not profitable for you. As a friend of mine told me yesterday, if you have cash flow you can weather just about anything.

Today, the Trucking Bozo said that the US economy was "Scheduled" to collapse, later this year. This was to be followed by the collapse of the gov't, by mid-'09.

This is to pave the way for the north American union, and the amero.

This was exposed by one or more participants in a high level, secret meeting. It seems that they had become highly disturbed at what they were told, in that meeting.

I weren't there, but...

With the massive expansion of taxes, regulations and enforcement, we have been hammered from all sides, since 9/11.

It seems the politicians & gov't have done all they can, to beat us down. At the same time, they have wasted no opportunity to strengthen illegal aliens, our enemies and competitors, the world over.

For some reason, I keep thinking about that young Chinaman, that stood in front of that tank, in the square.

The only one of those things "scheduled" to collapse is the Bozo's mind...Early 2008, I think :roll: I'd say he should just stick to trucking but he can't even get that right.

A lot of conspiracy theories are hair-brained, but a lot of stories sound wilder than fiction before they are proven to be true, too. Take the WTC, I personally doubt those airplane crashes caused them to just fold up like that (don't just react until you watch AND listen to what these videos are actually saying. There are four parts):

http://youtube.com/watch?v=JWpWc_suPWo

I don't know if anyone planned the downfall of this country or not. I do know this, we look dumber than dumb for consistently shooting ourselves in the foot, day after day, year after year. So many of the problems we have have been brewing for a long, long time, and yet we haven't changed our course. We'll see what happens. Maybe the economy will just bounce back, but people who don't thinks so don't sound crazy at all.