Driver shortage eases slightly in US trucking sector
While there is still a severe imbalance between available truck drivers and demand for trucks, the situation has eased up a bit since the summer, according to industry sources. Increases in demand from softening fuel prices has been balanced out by the seasonal decrease in demand from sources such as agriculture, leading to a much-needed sideways trend while trucking companies struggle to hire new drivers. Already, carriers are handling as much freight as they can. "The number of trucks operated by the truckload industry is still down about 12 percent from the height in late 2006, yet tonnage levels are about the same as in late 2006," said American Trucking Association (ATA) Chief Economist Bob Costello. But without an available pool of new drivers, companies are reluctant to invest in new trucks and equipment. Yet even as demand has eased in the past few months, trucking companies and independent truck owner/operators are still in the driver's seat when it comes to rates, which have remained high and not very negotiable.
Other concerns on the trucking sector's mind includes the dilapidated state of many highways across the US. The ATA believes that President Obama's latest jobs bill will only serve as a Band-Aid, as the $27.5 billion portion of the yet-to-be passed American Jobs Act slotted for repairs and expansions to US roads and bridges would only be temporary funds. "For almost two years, we've been playing the dangerous game of passing extension after extension, casting doubt on our ability to undertake significant projects," said ATA President and CEO Bill Graves. "This jobs proposal gets us no closer to passage of a multiyear bill, and in fact, may contribute to even further delays in passing one." Graves conceded that passage of the bill would lead directly to job creation, the effect on the nation's highway infrastructure would not be the long-term improvement the trucking sector sorely needs.
North American rail traffic continues to grow
Like the trucking sector, North American rail companies are seemingly immune to the gloom-and-doom predictions of another recession or ever-stagnant economy. The Association of American Railroads (AAR) reported yet another month of US traffic gains in September, up 1.1 percent for carloads and 2.3 percent for containers and trailers compared to the year before. More notably, quarterly data show an incredible boost from a historical standpoint. Through the third quarter of 2011, total carloads were at 87 percent of levels they were at in Q3 2006--the highest year on record for US rail traffic--and total containers and trailers were at 96 percent of totals from the same period in 2006.
Nevertheless, AAR Senior Vice President John T. Gray remained optimistic, stating that "rail traffic is consistent with an economy that is probably still growing," even though the growth is slower than what the country desires. Also pointing toward optimism are rail employment levels, which saw a gain of 1,191 jobs added in August. Additionally, rail car owners brought 11,087 cars out of storage in September, leaving only 17.1 percent of the North American rail car fleet in storage.
Barge activity still strong, despite seasonal expectations falling a bit short
As the grain season--the barge market's busiest months of the year--comes to a close this month, many have observed that it was not as intense as in years past, and a lack of excessive demand resulted in moderate barge rates for Southbound river cargo. However, there has still not been an excess in capacity, as export coal has easily filled up any holes left by the less-than-strong grain demand. As for Northbound traffic, activity from imports such as steel has still been rather lackluster, and some barge operators have even found it more profitable to send empty vessels up north to book guaranteed grain or coal loadings. In fact, some sources estimate that 70-90 percent of all Northbound traffic is empty tows.
Barge activity on the Great Lakes, on the other hand, has not been as robust. According to the Lake Carriers' Association (LCA), US-flag Great Lakes freighters carried 10.1 million tons of dry bulk cargo in September--a decrease of 2.7 percent compared to August, but still a 7.6 percent increase compared to a year ago. Iron ore shipments specifically totaled 6.4 million tons for the month, also dropping 2.3 percent from August and 19.5 percent from September 2010.