A bit of good news for the freight market: truck tonnage went up 0.3% in July, according to data compiled by the American Trucking Assns. (ATA). That means that the industry is finding business from other sectors to compensate for a major falloff in home construction-related loads.
“The weakness in the residential construction market continues to have a disproportionately larger impact on truck tonnage than the number of loads transported,” said Bob Costello, ATA’s chief economist. “Construction freight on average weighs more than general freight. As a result, the weakness in the construction market is having a bigger impact on truck tonnage.”
Gary Gerstenslager, president and COO of truck component supplier Hendrickson, said the housing market meltdown is hurting trucking the most at this point as that market represents 20% of overall freight demand.
ATA’s Costello added that July’s tonnage reading points to continued softness in the trucking industry, specifically as it relates to the weight of goods shipped. He stressed, however, that other measures of trucking volumes are not as lackluster. The number of for-hire loads, for example, which ATA publishes in a separate report, increased 0.4% during the first half of 2007 on a year-over-year basis.
Costello also noted that several trends indicate a modest 2007 fall freight season as shippers are increasingly spread the peak season over more months. However, he said the housing market is expected to remain down and economists predict only moderate economic growth in the near term.
“There’s no question there are major up and down cycles in the trucking market and they can be mean – and we’re in a mean one now,” Stuart James, vp-sales for trailer maker Hyundai Translead, told FleetOwner. “But almost everything America uses moves by truck. And with railroads at capacity, there’s no question that the trucking market might go down permanently. It’s just a question of living through the down cycle.”