LITTLE ROCK — Truck tonnage continues to slowly recover as retailers come close to correcting a supply-and-demand imbalance of consumer goods.
Spending by American households makes up 70 percent of the economy, and about 69 percent of domestic freight moved throughout the United States is shipped by trucks.
Bob Costello, chief economist with the American Trucking Associations, said November data showed that improving economic activity pushed the seasonally adjusted, for-hire truck tonnage index higher.
The index’s 106.4 level represented the best year over-year showing in the past 12 months. The Arlington, Va.-based trade group has set 100 as the base volume and 2000 as the base year. The index measures the weight of freight hauled by trucks.
“Truck freight had been hurt by both slow economic output and bloated inventories,” Costello wrote in a news release. “However, we now have evidence that the inventories are in much better shape, which will not be such a drag on freight volumes.”
Greg Carman, president of Carman Inc. of Fort Smith, said he doesn’t think the November tonnage level is sustainable.
“The customers I’m dealing with have drawn down inventory levels so low that they’re just doing basic restocking,” he said, adding that it’s not a real indication that the economy is getting any better.
Carman’s 50-truck fleet, which hauls general commodities, has recently had to make a few urgent deliveries because of the depletion.
“I don’t see anything really dramatic happening at all” in the coming year, Carman said.
The trucking industry has been battling a freight recession that dates back to December 2006.
Freight demand slumped along with the pullback in the residential housing market, automotive and manufacturing industries.
The drop in demand has meant that shippers are renegotiating lower rates per mile during a time when record-setting diesel fuel prices helped push many struggling carriers - mostly small-tomedium-sized outfits - out of the industry.
Large carriers have also folded or filed for Chapter 11 bankruptcy during the course of the recession.
Jevic Transportation of Delanco, N.J., filed for bankruptcy protection along with laying off the drivers of its 1,000-truck fleet. Closer to home, Arrow Trucking Co. of Tulsa abruptly quit the business on Dec. 22, taking its fleet of 1,300 trucks off the roads.
Operating uncertainty remains for YRC Worldwide Inc., one of the world’s largest transportation providers.
The less-than-truckload carrier has attempted since Dec. 7 to rally an estimated 95 percent of debt holders to approve a debt-for-equity exchange to keep it in business.
YRC Worldwide on Wednesday said it extended the expiration deadline to 11:59 EST that day to get the approval.
The trucking business reported an 81 percent rate of approval.
The Overland Park, Kan.-based carrier operates more than 15,000 trucks throughout the country.
Even if the company gets the needed approval some financial analysts question whether YRC Worldwide will make it. They cite additional financial obstacles that the carrier will need to overcome.
And that’s in addition to a tenuous 2010 freight forecast.
“I continue to believe that both the economy and truck tonnage will exhibit starts and stops in the months ahead,” the American Trucking Associations’ Costello wrote. “But the general trend should be for moderate growth.”
Business, Pages 23 on 12/31/2009