Wednesday, June 13, 2018

A Very Simple Freight Analysis


Trucking conditions are in wonderful shape. Fleets can’t keep up with demand and freight rates are high. Sales of trucks and trailers are expected to
approach record levels this year. The need for new truck drivers is huge and fleets and many owner-operators are making lots of money.


What’s going on?

* Total Manufacturing (from the Industrial Production data) is strong. Meaning:

The Freight Is Great!

* Food shipments are robust. People have more disposable income and are spending lots of it at restaurants. Result:

The Freight Is Great!

* Building materials are also healthy, but expected to moderate some in the second half of the year. There is a demand for new houses and office buildings. Causing:

The Freight Is Great!

* Chemical products started of the year slow, but are expected to recover in Q2 and beyond. Manufacturing should boost this sector. Leading to:

The Freight Is Great!

* Fabricated Metals are smoking hot. Manufacturing needs these components in high volumes. Making:

The Freight Is Great!

* Wood products are also up due to the construction sector. Subsequently:

The Freight Is Great!

* Durable Goods manufacturing is way up. Non-Durables are growing. Result:

The Freight Is Great!

* The Oil and Gas sector is exploding as crude oil prices rise. Causing:

The Freight Is Great!

* FTR’s Trucking Condition Index is at extremely high levels and is only expected to moderate slightly this year. Why?

The Freight Is Great!

* FTR’s Trucking Market Demand Index was at a record in April. Indicating:

The Freight Is Great!

* Unemployment just sank to 3.8%. People have jobs. People have money. People are buying lots of products that are moved by trucks. Result:

The Freight Is Great!

* Some economists have forecasted GDP growth of 4% for Q2. Which leads to:

The Freight Is Great!

* FTR’s Active Truck Utilization measurement is near 100% and expected to stay that way throughout 2018. This means nearly all active Class 8 trucks are being employed, because, of course –

The Freight Is Great!

* An industry veteran recently said he has never seen a market this strong in his 28 years of trucking. This is because:

The Freight Is Great!

* When traveling down the highway, you see many tractor-trailers hauling many types of goods. All because:

The Freight Is Great!

* There is a severe shortage of truck drivers to haul all the goods. Due to:

The Freight Is Great!

Demand for new Class 8 trucks and commercial trailers are at record levels. So much so, that component suppliers cannot keep up with orders. All because:

The Freight Is Great!

A German economist analyzing this situation might say:

Die Fracht ist großartig!

Which translated means: The Freight Is Great!

So, to summarize the current state of the trucking industry in four words:

The Freight Is Great!

This post first appeared on the FTR website with minor changes here..  FTR is the leader in analyzing and forecasting the commercial transportation industry.  For more information on FTR reports and services, please click here.)

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