MY ETT News » recovery

Falling diesel prices more a short-term blip

Rhonda Flathman — Wed, 17 Aug 2011 18:34:05 +0000

While prices at the pump have only been slightly less painful, don’t expect them to improve by declining, according to experts. Diesel in the U.S. tumbled by more than 10 cents a gallon on average, but that’s expected to be something of the calm before the storm. For the short term, prices will range from about $3.65 to $3.90 a gallon, and longer term, diesel could fetch upwards of $4 a gallon, according to the Oil Price Information Service (OPIS). Though painful for some, that $4/gallon price will actually reflect a strength in the global economy and fuel costs should reach that mark provided there isn’t a recession.

Fuel Prices Tumble, But Could Reach $4/Gallon in 2012
Though diesel fuel prices in the U.S. took a welcome nosedive over the past two weeks, dropping an average of over 10 cents per gallon between Aug. 1 and Aug. 15 – experts not only believe the decline will be short-lived, but it will also be muted given the broader economic uncertainty now occurring.

“It’s a positive for trucking that diesel fuel prices are now falling, but a lot of the benefit is getting washed out because of all the economic volatility at the moment – and broad volatility is not good,” Jonathan Starks, director of transportation analysis for research firm FTR Associates, told Fleet Owner.

Click here to visit Fleet Owner and read the complete story.

Manufacturing driving freight

Rhonda Flathman — Thu, 28 Jul 2011 18:45:54 +0000

Trucking is getting a boost from healthy manufacturing levels, and its pace is predicted to keep growing over the next year. Between demand for raw materials and consumer goods, that’s expected to keep truckers busy, despite the sluggish or slowing economic climate. American Trucking Associations chief economist says the strength of freight activity through the end of the year will be dependent on how manufacturing performs. Positive indicators for this include improved consumer confidence and optimism among large industrial manufacturing companies as indicated by the latest PricewaterhouseCoopers US Manufacturing Barometer.

Healthy Manufacturing Activity Will Boost Freight
Though overall economic growth in the U.S. continues to slow, output from the manufacturing sector is projected to keep steadily growing for the next 12 months, producing steady freight volumes for truckers. Economists are predicting U.S. gross domestic product (GDP) growth to only reach 1.8% in the second quarter, down from the first quarter’s anemic 1.9% GDP figure, but as long as manufacturing continues to hum along, carriers could see growth.

“The manufacturing sector has steadily increased its activity over the past year and retains a steady outlook for growth. For truckers, that means they will still see a reasonable level of shipment demand from manufacturing, with that level increasing,” Barry Misthal, U.S. industrial manufacturing leader for global consulting firm PricewaterhouseCoopers (PwC), told Fleet Owner.

Click here to visit Fleet Owner and read the complete story.

Replacement units only, please

Rhonda Flathman — Fri, 22 Jul 2011 16:03:58 +0000

Though the recent resurgence in Class 8 truck sales is positive, many fleets remain cautiously optimistic about the economy. That’s why many of the new truck orders are driven by the desire to replace aging equipment, not to add capacity. Still, there is more than enough equipment in most fleets to replace, as this marks the oldest the U.S. trucking fleet has ever been, according to FTR Associates. Though availability of credit and volatile fuel prices have an effect, the age factor alone is what’s driving much of the surge in new truck orders and sales. As a result, FTR expects total North American Class 8 factory shipments to top 259,000 units this year and surpass 299,000 units in 2012 – a significant increase over the 153,969 units shipped in 2010.

Aging Fleets Largely Responsible for New Truck Orders
Despite a strong run-up in Class 8 sales this year, accompanied by a still-significant backlog of orders, fleets remain largely focused on only using newly purchased units to replace older equipment – not to expand their operations with additional capacity.

“What we’ve really seen this year is the ‘perfect storm’ if your will for the Class 8 market,” Eric Starks, president of FTR Associates, told Fleet Owner. “The age of the U.S. trucking fleet is the oldest it’s ever been, a lot of large carriers had cash on hand, decent freight volumes combined with tight capacity pushed up rates, and the ability to depreciate new assets 100% this year combined to drive up orders and sales.”

Click here to visit Fleet Owner and read the complete story.

TransCore’s N.A. Freight Index soars to second-highest level ever

Rhonda Flathman — Thu, 21 Jul 2011 19:03:36 +0000

TransCore’s North American Freight Index came just short of eclipsing its all-time high. For June, the index notched its second-highest load volume for the year and in its 15-year history. Freight availability jumped by 15 percent from May and 37 percent from the same time last year, and truckload freight rates rose for all freight markets. TransCore’s monthly North American Freight Index measures truckload freight movement on the spot market, reflecting freight availability on TransCore’s network of load boards in the US and Canada.

PORTLAND, Ore. — TransCore’s North American Freight Index recorded the second-highest load volume this year and in its 15-year history for the month of June. Freight availability was higher only in March. Compared to the previous month, June freight increased 15%, and 37% compared to June of last year. June also marked the sixth consecutive month to exceed its five-year historical comparison.

Truckload freight rates rose seasonally on the spot market in June for all equipment types, according to TransCore’s Truckload Rate Index. The national average rate rose 4.5% in June for dry vans compared to May and 3.8% compared to June 2010. Refrigerated vans were up 5.6% month-over-month and 4.9% year-over-year, while flatbed rates increased 0.6% for the month and 7.4% compared to June 2010.

Click here to visit Truck News and read the complete story.

Truck production capacity may be tapped out

Rhonda Flathman — Wed, 20 Jul 2011 20:47:33 +0000

A healthy rebound in truck orders has pushed production capacity of Class 8 vehicles to its limits. And those limitations are further exacerbated by the shortage of tires, axles and other second- and third-tier components. As a result, manufacturers are approaching their production capacities with a tempered conservativism due to these potential shortages. When production of Class 8 trucks begins to level off, it will be based on smaller suppliers not being able to keep pace with the demand for heavy-duty vehicles.

While orders for heavy trucks remain strong, despite uneven freight volumes and slowdown in the U.S. economy, the manufacturing capacity to build them may have reached a ceiling of sorts – particularly due to the limitations of second and third tier suppliers.

“There’s been a shortage of axles and tires for quite some time, but there’s also a growing dearth of other sub assemblies as well,” Steve Tam, vp-commercial vehicle sector for ACT Research Co., told Fleet Owner.

“There’s a modicum of conservativeness as well among the major OEMs in the truck manufacturing space, but the production limitations really revolve around the limitations of those suppliers,” he added.

Click here to visit Fleet Owner and read the complete story.

Record-high exports driving up truck freight

Rhonda Flathman — Wed, 15 Jun 2011 18:00:01 +0000

Rising export levels and a resurgence in manufacturing have in part been responsible for driving up truck freight. And that could continue to grow or at least be sustained for a while, according to the latest numbers from the Bureau of Economic Analysis (BEA). Exports posted a record-breaking high in April, increasing $2 billion to $126.4 billion in terms of goods. But just as important as the boost it’s giving to freight volumes is the broadening siginificance of exports. One prominent banking official says the record-setting April numbers “underscores the expanding role that exports play in the U.S. economy.”

Freight Boosted By Record-Setting Export Activity
Exports of U.S. goods and services for April totaled $175.6 billion – the largest monthly total ever recorded and surpassing the previous month’s record of $172.7 billion, according to data from the Bureau of Economic Analysis (BEA) of the U.S. Commerce Dept. BEA reported that in April. exports of goods increased $2.0 billion to $126.4 billion. And exports of services increased $0.2 billion to $49.1 billion.

“April’s record-setting U.S. export total underscores the expanding role that exports play in the U.S. economy,” said Fred Hochberg, chairman and president of U.S. Export-Import Bank, in a statement.

Click here to visit Fleet Owner and read the complete story.

Pulse of Commerce Index indicates economy stuck in neutral

Rhonda Flathman — Tue, 14 Jun 2011 14:38:47 +0000

The U.S. economy experienced four months of high growth from late 2009 to mid-2010, but since then seems to be stuck in neutral, according to the latest reading of the Pulse of Commerce Index, which is released jointly by Ceridian Corp. and the UCLA Anderson School of Management. This assessment is reinforced by the National Bureau of Economic Research, where economists declared the recession over in June 2009 followed by a recovery period fueled primarily by inventory restocking and was not accompanied by a resurgence in home sales nor employment gains. Since that time, growth has been shaky at best, as both restocking and home sales have weakened.

PCI Notes Economic Recovery Continues Sluggish Pace
The Ceridian-UCLA Pulse of Commerce Index, issued Wednesday, June 8, fell 0.9 percent on a seasonally and workday adjusted basis in May after falling 0.5 percent in April. The index by the UCLA Anderson School of Management and Ceridian Corp. now has declined in four of the first five months of 2011, and in eight of the past 12 months.

“The PCI makes it clear that the high-growth recovery lasted only four quarters from 2009 Q3 to 2010 Q2,” says Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast. “Since then, the PCI and the economy have been idling, not powering forward. We are going to have to get the recovery going again to make a material dent in the chronic jobless problem.”

Click here to visit CCJ and read the complete story.

Will carriers survive latest fuel run-up?

Rhonda Flathman — Wed, 18 May 2011 19:46:27 +0000

The trucking industry is getting strong enough to weather the effects of higher fuel prices, but not all small or medium-sized companies may make it. Research firm FTR Associates surmises that fuel prices have reached their peak, yet even despite the increases, it’s not slowing down fleets that are looking to replace older equipment. Orders for Class 8 vehicles have jumped by triple-digit percentage points–158 percent, according to ACT Research, which predicts those numbers could be even higher if fuel prices were lower. Not everyone will be able to survive the latest jump in fuel, but the good news is that more will survive than in 2008 with higher costs combined with sluggish freight forced many companies out of business. Already, about 300 companies have declared bankruptcy in this year’s first quarter, compared to more than 700 for the same period in 2010.

Higher Fuel Prices Aren't Hitting Trucking as Hard This Time Around
High diesel fuel prices are having a ripple effect throughout the economy, but the resulting impact to trucking is a little harder to quantify, according to several experts.

“The prices have started to stabilize,” Eric Starks, president of FTR Associates, said. “I think there is a general consensus that we’ve reached the peak.”

Average diesel prices surpassed $4/gal. before the calendar turned to May, but that hasn’t significantly changed equipment purchasing habits, according to Starks, who noted that April Class 8 truck orders increased considerably despite the rapid rise of diesel fuel.

Click here to visit Fleet Owner and read the complete story.

Preliminary net Class 8 orders surge again in April

Rhonda Flathman — Mon, 09 May 2011 15:00:59 +0000

Preliminary data released by FTR Associates for net Class 8 truck orders for April show another strong month for the industry. Last month’s numbers rose 32 percent over March, which posted a 20 percent increase over February’s numbers. The annualized rate for the past three months is at 362,700 units, and includes the United States, Canada, Mexico and exports. The concern being expressed now is whether manufacturers and suppliers are well-stocked enough to meet this growing demand. This is affecting how FTR Associates may develop forecast numbers, as the research firm has indicated there are already shortages in the supply chain.

As Demand for Class 8 Trucks Grows, Can Supply Keep Up?
FTR Associates on Friday, May 6, released preliminary data showing April Class 8 truck total net orders for all major North American OEMs at 37,922, a 32 percent increase over March, continuing the trend of significant month-over-month increases. March orders were 20 percent above February, with the annualized rate for the past three months now at 362,700 units. The figure includes the United States, Canada, Mexico and exports.

Click here to visit CCJ and read the complete story.

ATD chairman: Commercial truck retailing is improving

Rhonda Flathman — Mon, 18 Apr 2011 18:23:40 +0000

After taking multiple hits from the economic downturn, commercial truck dealers are encouraged by several indicators that bode well for the industry. Speaking at the American Truck Dealers annual convention and expo in Phoenix, ATD chairman Kyle Treadway outlined five reasons for the nation’s commercial truck dealers to be optimistic this year. Among those reasons are improvements in freight volumes, used truck demand, which in turn boosts prices, and parts and service business.

After enduring a global economic downturn and diminished sales over the past couple years, the nation’s commercial truck dealers eagerly are waiting to get “back to normal” and setting their sights on the legislative and regulatory challenges ahead, said Kyle Treadway, chairman of the American Truck Dealers.

“It’s appropriate that we’re meeting in Phoenix – the city named after a mythical bird that rises from the ashes to begin life anew,” said Treadway in remarks Saturday, April 16, at the 48th annual ATD Convention and Expo, which runs through Monday, April 18, at the Phoenix Convention Center.

Click here to visit CCJ and read the complete story.