The Return of Growth

This Editorial appears in the Feb. 1 print edition of Transport Topics. Click here to subscribe today.

At long last, we report this week that American Trucking Associations’ freight index actually rose, as tonnage carried by fleets in December was 6.6% greater than what was moved in the same month of 2008 (click here for p. 1 story).

Before this report, tonnage had declined for 14 straight months since September 2008 as the recession shrank output and demand, sending all sectors of the economy into a spiral.

The index now stands at 108.4, the highest reading since November 2008 and well above the 99.2 level it hit in April, at the depth of the recession. In the index, 100 equals the level of freight carried in 2000.

Even better than the numbers were the words of some fleet executives we interviewed: “We are in the early stages of a turnaround in the truckload freight market,” said Kevin Knight, chairman and CEO of Knight Transportation. And Stephen Russell, CEO of Celadon Group, said, “We saw significant gains throughout the quarter, but overall demand was frankly surprising.”

Add to that ATA Chief Economist Bob Costello’s comments that tonnage is “likely to continue to grow on a year-over-year basis,” and perhaps it’s time to turn to allow some optimism to creep into our lives.

We’re certainly not out of the woods yet. One of the reasons it’s easier to expect higher numbers in the future is how low the level of business had gotten during the recession. But there can be little doubt that we’re headed in the right direction.

Meanwhile, we’re still waiting for details on what President Obama has in mind for the federal budget, regarding the nation’s infrastructure in general and the highway reauthorization bill in particular.

The early signs are mixed. In his State of the Union speech on Jan. 27, the president referenced the need to keep America’s infrastructure modern and strong to move goods, but we’ve yet to see any strong commitment to coming up with the money to do so.

Up to now, it’s been Congress that has been pushing the White House for more spending on infrastructure. Let’s hope President Obama’s remarks were a harbinger of good things to come for resolving congestion and transportation bottlenecks.

We’ll all know more this week, when the new budget is officially unveiled.