Cyclists often display bumper stickers or yard signs reminding motorists to “share the road.” The U.S. Department of Transportation even has a website providing information about safe road sharing.
Although these reminders are typically lighthearted, the message is serious: as road congestion increases, vehicles of all types are more likely to be involved in collisions. This unsurprising relationship between road congestion and vehicle collisions has been documented repeatedly for quite some time, and applies as aptly to large commercial trucks as to smaller vehicles.
For this reason, drivers of all vehicle classes should take note of the recent travel monitoring reports from the U.S. DOT, which show that monthly miles traveled increased year-over-year during nearly every month in 2012. During the recent recession, motorists broke a long-running trend of annual increases in vehicle miles traveled, and the trend then remained flat to decreasing for much of the past five years (Figure 1).
As the economy slowly improves – and provided gasoline prices remain fairly stable – annual vehicle miles traveled are likely to continue increasing, perhaps returning to the long-term trend. Over the next few years, the phrase “share the road” may ring truer than ever.
Archives
More on the Ebb and Flow of Truck Drivers
Last week, the U.S. Bureau of Labor Statistics reported (.pdf) that firms added 157,000 employees to their payrolls during January. As in December, the Construction and Manufacturing sectors continued to expand. But, for-hire trucking employment also grew, increasing by 5000 employees since December.
In another article, I examined transitions from and to for-hire employment in trucking. If manufacturing and construction are close substitutes for trucking, should all three of these occupations be swelling their payrolls simultaneously – especially when the overall unemployment rate remains at 7.9 percent?
Below, I update my previous analysis to incorporate time, showing the extent of employment transitions to and from trucking during each year over the last decade. Specifically, I use the previously discussed CPS-MORG employment transitions to show the ratio of new truckers to former truckers by year, rather than combined into a single measure for each sector. I present this ratio for three of trucking’s most related sectors: construction, trade (wholesale or retail), and manufacturing.
In the figure, a value of zero for a sector indicates that there is an equal flow of workers moving from that sector to employment in trucking as there is exiting for-hire trucking to that sector. A value of 0.5 indicates that there are three new truckers coming from that sector for every two former truckers departing for that sector.
Construction activity sharply declined during the recession, so it is not surprising to see an influx of construction workers into trucking towards the end of the decade. However, now that the construction sector is rapidly expanding again (.pdf), this trend could easily reverse.
The relative shift of truckers to manufacturing during recent years is also concerning, and as manufacturing activity continues to improve, this pattern is likely to continue.
Retail and wholesale trade appear to be the most balanced of the sectors, in terms of transitions to and from trucking. At this time, there is little reason to anticipate this pattern changing substantially.
About the author
Jeremy West is the Internet Truckstop research economist for the weekly Trans4Cast. Jeremy examines the broader economic picture and reports how the current economic headlines relate to the trucking industry. He holds a bachelor of science in Economics, with minor degrees in Business and Creative Studies, from Texas A&M University, where he is currently completing a doctorate in Economics. His research focuses on empirical analysis of topics in industrial organization, particularly those affecting the transportation sector. In addition to his academic training, Jeremy held several previous positions in corporate financial planning and economic forecasting. Jeremy enjoys the opportunity to offer highlights and analysis of the trucking industry.
Do I Ever Need the Christmas Spirit This Year!
***This post is originally from www.teamrunsmart.com Internet Truckstop is the official load board for Team Run Smart. Check out all their great articles on their website!
Every driver’s day has its ordinary “driving down the road” challenges and having a good attitude can you stay positive and not overreact to difficult situations. The right attitude will make a more professional, safety conscious driver. It can also help you earn more money and get more enjoyment from driving. However, the challenges the industry faces has made a positive attitude difficult to maintain.
Here are a few of the challenges that have brought on some sleepless nights for many owner-operators and company drivers:
- The changes in CSA regulations
- Hours of service regulations
- Clean air regulations
- Increased cost of equipment
- Increasing diesel fuel prices
- Difficulties getting loans for new equipment purchases
- Less parking spaces for trucks
- Rates not keeping up with costs
- Detention pay (the lack of and the need for)
So how do you keep up a positive attitude when you are faced with these challenges? Maybe there is a light at the end of the tunnel, knowing carriers have been successful at improving truck efficiency and reducing costs by optimizing fuel, improving truck and trailer aerodynamics, improving power train efficiency, and inventing new tools or ways to get the job done. If carriers can come out ahead, owner-operators and company drivers can too.
Here are ways to overcome some of these challenges and keep up your Christmas cheer:
- Creative Brainstorm. Around the holidays, since you might have some additional downtime, start brainstorming and thinking creatively on ways to solve your business challenges. Catch up on the latest Team Run Smart articles to get industry news and business tips, or read posts in the Team Run Smart Forums to see how other drivers are solving their issues. Call some of your friends in the industry who are successful and ask them for advice. A fun idea for the holidays that keeps me in a positive attitude, is to watch my favorite Christmas shows. Seriously, it has helped me to relax and get the creative juices flowing. Start thinking outside the box and find new ways get over those bumps in the road to start fresh for the New Year.
- Choose your loads wisely. If the hours of driving each day get reduced, find a way to deliver the product on time. After all, if Santa Clause can make all his delivers to every house on the globe, surely we can find a way to make one delivery on time. The change might be to quit hauling loads for folks that make us sit at a loading dock for an unreasonable amount of time without any detention pay. Of course, this time of year, we can be held up by bad weather and road closers. You may consider a computer program or GPS system that provides weather updates and road conditions. Make sure you get the phone number for road conditions of each state and call ahead to change your route if necessary prior to being detained.
- Become a business minded entrepreneur. Changes in CSA will make us all better business minded entrepreneurs. CSA regulations are changing the way owners evaluate and train their drivers. Using electronic logs to ensure drivers comply with hours-of-service laws and using smart phones and iPads to take care of daily paperwork are a just a few of these recent changes.
- Remember regulations may save you money in the long run. Regulations like the new CARB Greenhouse Gas Regulation will actually save you money because it forces drivers to take advantage of some of the fuel-efficient technologies available. This is better for you and the environment. (Link to CARB article.)
- Consider switching to natural gas from diesel. Even though the cost of purchasing a new truck (which would most likely be necessary) is higher, the payback is fast because natural gas is less expensive than fuel. There also exists the side benefit of burning a cleaner fuel with less bad emissions, making the clean air folks happy. The engine manufactures are already developing the powerhouses for class 8 trucks. Several companies are developing a network of refueling facilities, enabling cross-country trips. (Link to natural gas article.)
- Embrace technology. The new technological advances going into the cab of a truck at a record-setting pace should be looked at as assets to enable us to do a better and safer job. This integration of networked electronics with trucks means, in theory, telematics could do everything from automatically slowing a truck down when it approaches a blind curve, to diagnosing vehicle issues remotely for preventative maintenance. With telematics, your truck will have the ability to report your driving style to your boss or insurance company. It’ll keep track of any risky maneuvers you perform and tell the police if it thinks you’re to blame for an accident. If you are a safe driver, you have nothing to worry about and it should help decrease the number of truck accidents on the road, which will help boost the industry image. Telematics will also cut down on highway traffic and decrease the amount of fuel burned by idling vehicles, which will again make the clean air folks happy. Some even envision it will decrease potential litigation costs by keeping having the facts on the truck’s every move.
Plan ahead, keep positive, and make this a holiday season full of love, happiness, and optimism. Let’s put the fun back into trucking for 2013. Merry Christmas and Happy New Year.
About the Author
Patrick Dickard -With over 25 years of experience in the transportation field, Pat Dickard brings a wealth of knowledge and application to the position of Corporate Trainer for Internet Truckstop. Transportation became a way of life as General Manager for a potato and onion packing and shipping facility in Oregon. He has experience shipping from Mexico to points throughout the US. Later years found Pat in the seat of a big rig traveling the highways of the country. By joining the staff at Internet Truckstop Pat is able to bring his experience as a business manager, business owner, truck driver, broker agent, and a shipper to the forefront to assist other folks in being more successful. Host of the ITS Business Development Webinar Series – Mr. Dickard covers subjects such as How to find new shipper clients, How to sell yourself and conduct a business meeting; Identity theft, theft of loads, fraud in the industry, How to qualify carriers faster with less risk, Insurance issues, tips and tricks of using the load board for best results, and negotiating rates.
Press Release – Internet Truckstop Launches a Platform to Analyze, Organize, Create and Execute the RFP Process
New Plymouth, Idaho–Internet Truckstop, the largest web-based freight matching service in the transportation industry, has launched a new request for proposal suite of services that was previously not available to brokers or third party logistic companies.
Internet Truckstop’s new Request for Proposal (RFP) Suite, is an advanced, cloud based system which requires no software installation and allows users to create, distribute and compete in the RFP Process.
“Our goal in developing the RFP suite was to provide our customers with a ground breaking RFP solution that would reduce the amount of time spent compiling data while also providing additional carrier capacity if needed when bidding on a RFP’s,” says Leigh Foxall, Director, Freight Matching. “Users can invite their pre-qualified core carrier group to participate in an RFP session as well as reach out to new potential carriers that are members of the Internet Truckstop community. Our service allows for customization to meet a user specific needs with user preferences being customized all the way down to lane choices. Users can quickly respond to RFP’s with a detailed understanding of their own available margins per lane as truck and rate history is uploaded directly into the platform.”
Internet Truckstop says their new RFP suite will help users manage their businesses and provide a single on-demand system to easily consolidate, organize, schedule, host, and award or accept lanes to selected transportation partners.
For more information visit www.truckstop.com or call 1-800-203-2540 x 6185
About Internet Truckstop
Founded in 1995, Internet Truckstop is the first and largest freight matching service on the web. Internet Truckstop offers more tools than any other freight matching service available. These easy-to-use tools, the largest freight database, and a commitment to the transportation industry make Internet Truckstop the leader in Internet freight matching.
Surprise, Surprise… the Manufacturing Sector Remains Choppy
By Jeremy West, Internet Truckstop Economist
Over the past few months, it has seemed like U.S. manufacturers are treading water. Factory output isn’t dramatically sinking, as occurs whenever the economy is entering a recession. But, on the other hand, we’re not seeing any production gains worth cheering about either.
Two basic metrics are tracked for manufacturing output: the quantity of current production and the volume of orders for future production. Last Thursday, the Census Bureau reported that new orders in August for factory production fell 5.2% month-over-month and 2.5% year-over-year. This was the first year-over-year decline in new orders since November 2009.
Much of this decline resulted from a 101.8% drop in orders for commercial aircraft. As shown in the figure, orders excluding transportation equipment increased by 0.28% YOY. Regardless, the message is clear: manufacturing production is stalling.
Separately, the Institute for Supply Management reported that the Purchasing Managers’ Index (PMI) increased to 51.5 during September. This was positive news: any value above 50 indicates manufacturing growth, and the index has been below 50 since May. The next few months will show whether this represents a temporary spike in manufacturing activity or a reversal of the contraction seen in the manufacturing sector during 2012Q2.
So, the production picture isn’t entirely gloomy, and some regions of the country are performing better than others. During September, manufacturing output improved in Texas and in the Central Atlantic regions, worsened in New York and in much of the Midwest, and remained largely flat in the Philadelphia region.
Taken together, these reports offer a mixed outlook for total manufacturing—and, subsequently, trucking—with aggregate production activity trending to the downside. The next Federal Reserve Industrial Production and Manufacturing report is scheduled for October 16th. Don’t be surprised to find that factories continued to slowly churn.
Market Demand Index (MDI) Decreases 2%
FOR IMMEDIATE RELEASE
NEW PLYMOUTH, ID (September 25, 2012) - Internet Truckstop, the largest web-based freight matching service in the transportation industry reports that the Market Demand Index (MDI) decreased 2% to 11.64 from 11.83 the previous week as reported in the weekly Trans4Cast.
The overall average equipment rate decreased 2% to $2.04 from $2.09 the previous week. Flatbed rates decreased 3% to $1.90 from $1.96 the previous week. Reefer rates decreased 3% to $2.08 from $2.16 the previous week. Specialized truck rates increased 2% to $2.45 from $2.41 the previous week. Van rates decreased 5% to $1.72 from $1.82 the previous week.
“With an upcoming national election, a looming “fiscal cliff,” and continuing instability in the Eurozone, the economic climate is quite unclear. And, the outlook will remain murky until businesses and consumers can better determine the political environment in which they must operate.” Jeremy West, Internet Truckstop Economist
About Trans4Cast powered by Internet Truckstop
Trans4Cast is the compilation of highly relevant data, easily accessible to all trucking professionals. The Market Demand Index (MDI), a measure of relative truck demand, is culled from Internet Truckstop data. Internet Truckstop compiles this weekly report that will assist in making critical business decisions. The report is now a web series with a news anchor and appears as the Industry Economic Update on BigTruckTV.com, Internet Truckstop, and Truckload Carriers Association. The show is produced bi-weekly and can be accessed online 24/7. Jeremy West is the economic consultant preparing this report. He holds a bachelor of science in Economics, with minor degrees in Business and Creative Studies, from Texas A&M University, where he is currently completing a doctorate in Economics. For more information on Trans4Cast, please contact Roxanne Bullard at 1-800-203-2540 ext. 6230.
Press Release – Tran4Cast Powered by Internet Truckstop Market Demand Index (MDI) Decreases 10%
Tran4Cast Powered by Internet Truckstop Market Demand Index (MDI) Decreases 10%
NEW PLYMOUTH, Idaho, September 18, 2012– Internet Truckstop, the largest web-based freight matching service in the transportation industry reports that the Market Demand Index (MDI) decreased 10% to 11.83 from 13.2 the previous week as reported in the weekly Trans4Cast.
The overall average equipment rate decreased 3% to $2.09 from $2.16 the previous week. Flatbed rates decreased 1% to $1.96 from $1.98 the previous week. Reefer rates decreased 6% to $2.16 from $2.30 the previous week. Specialized truck rates decreased 3% to $2.41 from $2.49 the previous week. Van rates decreased 2% to $1.82 from $1.86 the previous week.
“The economic climate remains tumultuous for trucking. On Friday, the Census Bureau reported that August retail sales increased nearly 1% from July, while the Federal Reserve reported that manufacturing activity shed 0.7% over the same period. Trucking activity should be seasonally strong through November, but broader instability continues to temper volumes and rates.”
Jeremy West, Internet Truckstop Economist
About Internet Truckstop
Founded in 1995, Internet Truckstop is the first and largest freight matching service on the web. Internet Truckstop offers more tools than any other freight matching service available. These easy-to-use tools, the largest freight database, and a commitment to the transportation industry make Internet Truckstop the leader in Internet freight matching.
About Trans4Cast powered by Internet Truckstop
Trans4Cast is the compilation of highly relevant data, easily accessible to all trucking professionals. The Market Demand Index (MDI), a measure of relative truck demand, is culled from Internet Truckstop data. Internet Truckstop compiles this weekly report that will assist in making critical business decisions. The report is now a web series with a news anchor and appears as the Industry Economic Update on BigTruckTV.com, Internet Truckstop, and Truckload Carriers Association. The show is produced bi-weekly and can be accessed online 24/7. Jeremy West is the economic consultant preparing this report. He holds a bachelor of science in Economics, with minor degrees in Business and Creative Studies, from Texas A&M University, where he is currently completing a doctorate in Economics. For more information on Trans4Cast, please contact Roxanne Bullard at 1-800-203-2540 ext. 6230.
Press Release – Trand4Cast Powered by Internet Truckstop Market Demand Index (MDI) Increases 2%
New Plymouth, Idaho, September 11, 2012–Internet Truckstop, the largest web-based freight matching service in the transportation industry reports that the Market Demand Index (MDI) increased 2% to 13.2 from 12.96 the previous week as reported in the weekly Trans4Cast.
The overall average equipment rate decreased 1% to $2.16 from $2.17 the previous week. Flatbed rates decreased 2% to $1.98 from $2.01 the previous week. Reefer rates increased 4% to $2.30 from $2.21 the previous week. Specialized truck rates decreased 2% to $2.49 from $2.54 the previous week. Van rates decreased 3% to $1.86 from $1.92 the previous week.
One of the more disappointing economic reports last week was that the Institute for Supply Management’s proprietary PMI for manufacturing remained below 50 in August for the third consecutive month. The PMI is a composite measure of several dimensions of the supply chain, and any value below 50 reflects a contraction in U.S. manufacturing activity.
About Trans4Cast powered by Internet Truckstop
Trans4Cast is the compilation of highly relevant data, easily accessible to all trucking professionals. The Market Demand Index (MDI), a measure of relative truck demand, is culled from Internet Truckstop data. Internet Truckstop compiles this weekly report that will assist in making critical business decisions. The report is now a web series with a news anchor and appears as the Industry Economic Update on BigTruckTV.com, Internet Truckstop, and Truckload Carriers Association. The show is produced bi-weekly and can be accessed online 24/7. Jeremy West is the economic consultant preparing this report. He holds a bachelor of science in Economics, with minor degrees in Business and Creative Studies, from Texas A&M University, where he is currently completing a doctorate in Economics. For more information on Trans4Cast, please contact Roxanne Bullard at 1-800-203-2540 ext. 6230.
About Internet Truckstop
Founded in 1995, Internet Truckstop is the first and largest freight matching service on the web. Internet Truckstop offers more tools than any other freight matching service available. These easy-to-use tools, the largest freight database, and a commitment to the transportation industry make Internet Truckstop the leader in Internet freight matching.
Source:
Stephanie Sternes
800-203-2540 ext. 6186
stephanies@truckstop.com
Is manufacturing activity weakening? Comparing the Industrial Production Index to the PMI
One of the more disappointing economic reports last week was that the Institute for Supply Management’s proprietary PMI for manufacturing remained below 50 in August for the third consecutive month. The PMI is a composite measure of several dimensions of the supply chain, and any value below 50 reflects a contraction in U.S. manufacturing activity.
In contrast, the Manufacturing component of the Federal Reserve’s Industrial Production (IP) Index increased moderately during both June and July (the August values will be released this week on September 14th). The divergence of these two indices presents a conundrum: how can manufacturing be simultaneously increasing and decreasing?
The discrepancy primarily results from differences in the method by which each of these indices is constructed. The Federal Reserve determines monthly IP Manufacturing strictly by examining (actual and imputed) industrial output, sourced from various trade associations and censuses.
By comparison, the PMI is formed from surveys of ISM member businesses and reflects five components: new orders, production, employment, supplier deliveries, and inventories. Because it includes several components besides production, the PMI may contract even if current manufacturing volumes are increasing.
So, which of these two indices is superior? Or, more specifically, which index better contextualizes the environment for trucking? Although some analysts argue the PMI has inferior predictive power (e.g. Bachman, 2010), this relates more to its usefulness for forecasting economic recessions than its quality in measuring the current business climate.
Overall, both measures are valuable for carriers to use in evaluating their future outlook. The Industrial Production Index is informative about future volumes, especially over a longer term—goods that are produced are eventually going to be shipped, generating demand for trucks. The PMI speaks to the current manufacturing climate, and declines in the non-output portions of the PMI could foreshadow production declines to come.
Jeremy West, Internet Truckstop Economist
The Current State of the Economy and the Outlook for Trucking
The transportation sector is stagnant. Recent metrics of trucking volumes, such as the American Trucking Association’s monthly Truck Tonnage Index, and Internet Truckstop’s weekly Market Demand Index (which I personally report), have been flat for several weeks to months.
Partly, these mediocre trucking volumes reflect a broader lethargic economy. Second quarter GDP and personal consumption expenditures grew at a meager 1.5%. And, the near-term outlook is far from rosy. The nonpartisan U.S. Congressional Budget Office released GDP forecasts this week that, under some (unlikely) scenarios, see the economy re-enter recession during 2013 (the CBO’s more plausible expectation is for a continued slow pace of economic growth).
There is some semblance of a silver lining: construction activity is improving, as I noted in my previous post, and factory output has been slowly but steadily increasing. However, there is also a lot of broader economic uncertainty. Whereas economic indicators for the second quarter of 2012 were poor, reflecting a pattern of faltering growth, metrics released so far for July and August show potential for a somewhat more upbeat economy during the second half of this year.
In particular, July Retail Sales improved by 0.8%, breaking a three-month trend of declining sales volumes.Industrial Production increased by 0.6%, another noteworthy gain. The Reuters/University of Michigan Consumer Sentiment Index (preliminary) value for August shows a substantial improvement of consumer confidence. And, more residential building permits were issued in July than in any month during the past four years (building permits serve as a good leading indicator of future construction activity, which is a major component of demand for trucking).
It remains to be seen whether these more positive indicators will translate into improved trucking volumes and help break the industry out of its current flat pattern.
Jeremy West
