Last year, truck capacity dropped 3.1 percent due to the driver shortage as freight volumes grew by three percent.
These conditions drove freight rates up significantly, particularly in the spot market. Many manufacturers, shippers and retailers responded by stocking up on inventory to limit their transportation cost increases.
On Oct. 18, two economists at the American Trucking Associations’ annual Management Conference and Exhibition in Philadelphia blamed a glut of inventory for freight volumes slowing in 2015. That will all soon change, they believed, in the first quarter of 2016.
“The U.S. economy is on solid footing,” said Bob Costello, chief economist for ATA. “Once we get through this inventory cycle I expect there to be nice pickup (in freight volumes). It is going to turn on a dime at some point.”
The ATA tracks a number of metrics each month using data it collects from its truckload and less-than-truckload carrier members. Through August, 2015, the data showed load counts slowed from three percent growth in 2014 to 1.9 percent but are still very high in absolute terms, he noted.
Costello believes freight growth in 2016 will return to three percent in concert with overall economy growth that is being driven by consumer spending. In 2015, consumer spending grew by more than three percent on account of rising incomes from declining energy costs and historically low interest rates, explained Nariman Behravesh, Ph.D., and chief economist for IHS, Inc.
