"Compared with September 2011, the SA index was 2.4% higher, the smallest year-over-year increase since December 2009. Year-to-date, compared with the same period last year, tonnage was up 3.6%."The smallest increase since 2009 is not a good story for the transportation industry. Combine this with the fact that inventories are somewhat inflated - meaning no real inventory restocking is about to happen - and you realize this year ended very flat for freight and freight movements. Of course, we have been seeing this all along in our "unofficial" indices which I use to gauge freight demand. A couple of instructive trends to look at from the graph:
|ATA 9/2012 Truck Tonnage Graph|
Rail tells a bit of a different story and it is clear the migration from truck to intermodal is occurring at a fast pace. Market share of intermodal v. truck has to be increasing as I personally believe it has become the preferred mode wherever it can be applied. It used to be truck was preferred then people would "look at" intermodal and now I believe it is the exact reverse. Logistics Management magazine said in interviews with shippers at the Council of Supply Chain Management Professionals (CSCMP) Conference - 2012 shippers where now calling intermodal the "go to" mode of freight.
AAR reports while carloads are decreasing in volume, intermodal (IM) is increasing for all major US railroads. For week 42 (ending October 20, 2012) IM containers were up 6.1% yoy and 5.8% for the cumulative through week 42. Trailer on Flat Car (TOFC) continues to show significant declines as the migration to containers continues.
Overall we are seeing a very flat freight market and one which shows no real signs of major pick up through the beginning of 2013. If GDP continues to rise at or around 2% and roughly 10% of that number is "non freight" (i.e., financial etc.) then we will see below 2% growth in freight for the foreseeable future. This is far below the 3% most industry analysts believe is when the real "crunch" will occur.
Unless carriers decide to significantly shrink their business this will mean it will be far more about growing market share than it will be about grabbing more of a growing pie.