Steady Economic Growth
The latest economic reports continue to show steady growth in the domestic economy, and fleets are buying more tractors and ordering more trailers as freight levels now have exceeded year-ago levels for nine consecutive months.
Trailer orders in August were 55% higher than in the same month of 2009; for the year, fleets have ordered 71% more trailers than they did in the first eight months of last year (click here for p. 1 story, this issue).
ACT Research, which reported the gains, said they were occurring because “trucker profits have been rising all year . . . [which] is giving fleets the confidence to replace older equipment, including trailers.”
As we reported recently, August truck sales were 23.5% higher than the same month last year, and were up 16.5% for the year to date.
American Trucking Associations’ latest freight report showed that tonnage in August was 2.9% above year-ago levels, the ninth-straight increase in year-over-year comparisons.
The August increase in tonnage was definitely lower than the gains made in recent months, as the softening that many financial analysts have reported worked its way through the economy.
ATA’s chief economist, Bob Costello, said he expected the economy to continue to grow but at a “lackluster pace” for the rest of 2010 (click here for p. 1 story, this issue).
But business has been brisk enough for two of the nation’s largest less-than-truckload carriers to announce rate increases last week.
FedEx Freight said it would raise its regional and longhaul rates by 6.9%, effective Nov. 1, while ABF said it would raise rates 5.9% on Oct. 1 (click here for p. 4 story, this issue).
Meanwhile, officials of Daimler Truck Financial in the United States said business has been good and is getting better.
Revenue this year will be about 40% higher than last year, the officials said, and should reach $1.7 billion. They also reported that the number of fleets that are 30 days or more behind in their payments has dipped dramatically — to 20% from as high as 50% a year ago (click here for p. 4 story, this issue).
Taken as a whole, it’s clear that the economy — and the trucking industry — are experiencing better times, even if the rate of growth is slower than any of us would like. And, more importantly, fleets obviously are gearing up for what most seem to be betting are going to be better times in 2011.
