The latest data, to February 2015, shows volumes of Canadian and US forestry and wood products transported as stable — if moderately improving — over last year. As subscribers to the quarterly Madison’s Forest Pulse already know, volumes and values of wood products manufactured, shipped, and transported across North America for full-year 2014 were very similar to the previous year.
In more good news, according to several recent reports the transportation sector as a whole in the US is projected to witness significant growth this year, with all modes — including trucking, railroads and even the airline industry — expected to retain “sufficient pricing power and volumes”.
“All transportation sectors are expected to see a continued, moderately accelerating pace of growth through 2015, building on the improved 2014 growth rates,” noted Tanya Langman, a director with Fitch Ratings, in a statement issued April 10. However, she added that “some tapering” in transportation activity will occur due to winter “weather-related losses,” particularly in the Northeast and Midwest.
Where trucking is concerned, David Ross, managing director with Wall Street investment firm Stifel Nicolaus & Co, thinks that while 2015 may not be quite as robust as 2014, rates should continue to go up as truck-borne freight volumes keep increasing while capacity remains tight, according to Fleet Owner April 10.
Stifel is currently predicting that contract TL rate increases should jump 3 to 5 per cent in the first half of 2015 on a year-over-year basis, with dedicated TL rates climbing 2 to 4 per cent.
He added that the US freight transportation landscape over the next couple of years will be capacity-constrained due to rising volumes and flattish capacity, given driver shortage issues and added government regulations.
“Our models assume low-to-mid-single-digit rate increases; however, when/if it becomes real tight, rates should move up much higher — into the double-digits — in our view,” Ross said.
Canada and US Transportation Statistics
One reason behind the growing confidence in trucking’s ability to win further rate increases in trucking is that the US manufacturing sector is expected to remain strong this year — generating more freight for motor carriers to haul.
The most recent data for rail transportation also shows improvement. The Association of American Railroads reported US rail intermodal traffic rose 8.1 per cent in the week ended April 18 compared with the same week last year. Railroads moved 280,016 intermodal trailers and containers, the highest level this year, AAR announced Wednesday in its weekly report. The rise follows a 2.3 per cent increase the prior week.
Rail carload volume, which excludes intermodal units, increased 1.2 per cent year-over-year to 276,416 carloads.
Six of the 10 commodity groups that AAR tracks improved over last year.
Intermodal volume for 13 reporting North American railroads increased 8 per cent to 353,319 trailers and containers.
Canadian railroads moved 62,356 intermodal units, a 5.6 per cent rise. Mexican rail moved 10,947 units, a 23.1 per cent rise from the same time last year.
Year-to-date, U.S. intermodal volume increased 1 per cent to 3.84 million units.
Elsewhere, US trade with Canada and Mexico declined in February to the lowest level for the month since 2011 but freight carried by trucks increased, the Bureau of Transportation Statistics reported also Wednesday.
Truck freight increased 0.9 per cent as total trade declined 4.3 per cent to US$87.7 billion.
Trucks carried 63.1 per cent of the trade among NAFTA partners making them the most-heavily used mode of moving goods to and from Canada and Mexico.
The decline in February follows a 1.2 per cent drop the prior month that was due in part to the reduced price of mineral fuel shipments, according to BTS.
Trucks transported US$27.2 billion of exports and US$26.9 billion of imports between the NAFTA partners.
US-Canada trade for the month by truck declined 2.9 per cent, and rail dropped 13.3 per cent. Trucks carried 57.2 per cent of the US$45.1 billion in freight to and from Canada.
Trade with Mexico by truck increased 4.7 per cent from last year and accounted for 69.6 per cent of the US$40.6 billion of freight moved to and from the country.
Meanwhile, another key measure of freight demand shows the US economy in a somewhat better light than other economic indicators such as employment and manufacturing output.
The tonnage hauled by trucks on US highways rose 1.1 per cent in March, after falling 2.8 per cent in February from January, according to the American Trucking Association Wednesday.
Significantly, the ATA For-Hire truck Tonnage Index rose 5 per cent year-over-year, compared with a 3.3 per cent annualized increase in February and a 6.7 per cent increase in January.
As a whole, truck tonnage was flat in 1Q from 4Q 2014, the ATA said in a statement. Year-over-year, tonnage was up 5 per cent in 1Q.
In 2014, 1Q tonnage was depressed by a series of severe winter storms and frigid weather, said the ATA. The US economy shifted to a much higher gear once 2Q arrived.
As well, the number of job openings at US warehousing, transportation, and utility companies shot up 59 per cent in February, thanks largely to an easy year-over-year comparison with the snow and ice-locked employment market a year ago, according to Journal of Commerce Tuesday. The number of available transportation and warehousing jobs slipped from a revised 196,000 in January to 192,000 in February.
In comparison, the number of transport job openings in February 2014 dropped 46,000 from the previous month, as the polar vortex chilled labour markets.
The latest Job Openings and Labor Turnover data from the US Bureau of Labor Statistics shows transport, warehouse, and utility operators hired 130,000 workers in February, a slight increase from a year ago, and kept more of them. A total of 118,000 workers left transportation and utility jobs, compared with 295,000 “separations” in January, most likely due to the loss of seasonal holiday employees.
The latest BLS Jolt Survey underscores the rising call for transportation and warehousing workers and increasing labor and transportation cost pressures faced by shippers.
The BLS data reveal an improving job market for transport and logistics workers. Over the five months that ended in February, the number of openings in the transportation and warehousing field was up 28.3 percent on average compared with the same period in 2013-2014, according to the BLS data. In the 12 trailing months, those job openings averaged 174,000 a month. In the same period in 2013-14, the average was 137,900 jobs.
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