U.S. trucking sector sees gains; local truckers remain wary

Officials at Fort Smith-based ABF Freight System are guardedly optimistic about a report suggesting an improvement in the national trucking sector.

A nationwide recession in the freight industry began in October 2006 and has yet to end. Arkansas Best Corp., whose primary subsidiary is ABF Freight System, a nationwide less-than-truckload carrier, posted second quarter revenue of $362.6 million, a decline of 27.2% from the $498.5 million in the 2008 period. The company’s tonnage shipped was down 17.3% in the first half of 2009 compared to the first half of 2008.

But a report issued Friday (Sept. 25) by the American Trucking Associations’ indicates the freight recession may be near an end.

The ATA seasonally adjusted For-Hire Truck Tonnage Index increased 2.1% in August, matching July’s increase. The latest gain raised the index to 104.1 (2000=100), the best reading since February 2009.  The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 105.8 in August, down 0.5% from July.
 
The seasonally adjusted tonnage fell 7.5% compared to August 2008, which was the best year-over-year showing since November 2008.
 
“The gains in tonnage during July and August reflect a growing economy and less of an overhang in inventories,” said ATA Chief Economist Bob Costello.

Although “hopeful” that the overall future trend in truck tonnage will rise, Costello said, the pace of increase will likely moderate from the cumulative 4.3% gain over the last two months.

“While I am optimistic that the worst is behind us, most economic indicators, including industrial output and household spending, suggest freight tonnage will exhibit moderate, and probably inconsistent, growth in the months ahead,” Costello said.

David Humphrey, director of investor relations for Arkansas Best, said the company is seeing “very slight improvements” in tonnage shipped, and “modest improvements” in capturing market share from competitors. But don’t expect celebration at the company’s Fort Smith headquarters.

“However, because of the lesson from last year (when first half 2008 seemed to have bottomed out and then second half 2008 had a steep tonnage decline) we need to experience a longer period of sustained improvement before we feel much better about things,” Humphrey noted in an e-mail statement.

Trucking serves as a barometer of the U.S. economy, representing nearly 69% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods, according to the ATA.