State of American Trucking October 11, 2018 Rod Suarez Economic Analyst American Trucking Associations rsuarez@trucking.org
Business Cycles U.S. Expansions Duration October 1949 - July 1953 May 1954 - August 1957 April 1958 - April 1960 February 1961 - December 1969 November 1970 - November 1973 March 1975 - January 1980 July 1980 - July 1981 December 1982 - July 1990 March 1991 - March 2001 November 2001 - December 2007 June 2009 - Current 111+ Average 65 0 20 40 60 80 100 120 140 Months Sources: National Bureau of Economic Research and ATA
Average GDP Growth (%) U.S. Expansions by Strength & Duration (1949 to Current) 8 7 6 5 4 3 2 Current US Expansion 1 0 0 20 40 60 80 100 120 140 Months
Real Gross Domestic Product Growth 4% 3% 2.7% 2.9% 2.8% 2% 2.2% 2.3% 2.0% 1.5% 1% 0% Avg 2000-2007 Avg 2010-2015 2016 2017 2018 2019 2020 Sources: BEA & ATA
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 The Drivers of Truck Freight, Plus Inventories 7.0 Unemployment Rate (Percent) 1.4 Total Housing Starts (Millions) 106 Factory Output (Index) 1.45 Inventory to Sales Ratio 6.5 1.3 6.0 104 1.40 5.5 1.2 5.0 1.1 102 1.35 4.5 1.0 4.0 100 1.30 3.5 0.9 3.0 0.8 98 1.25 Sources: BLS, Census, and Federal Reserve
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Job Market Monthly Job Changes (Thousands) Unemployment Rate (Percent) 400 350 Previous 12-month avg: 201,400 7.0 6.5 2016 2017 2018 2019 300 6.0 4.9% 4.4% 3.9% 3.5% 250 5.5 200 5.0 150 4.5 100 4.0 50 0 3.5 3.0 Sep: lowest level since Dec 1969 Sources: BLS & ATA
2010 2011 2012 2013 2014 2015 2016 2017 2018 Thousands U.S. Economy is at Full-Employment 16,000 Unemployed and Job Openings 14,000 12,000 10,000 Unemployed Job Openings 8,000 6,000 4,000 2,000 0 Sources: Department of Labor
4% Employment Costs: Wages & Salaries 3% 3.2% 2.3% 2.4% 2.6% 3.1% 3.4% 3.5% 2% 1.8% 1% 0% Avg 2000-2007 Avg 2010-2014 2015 2016 2017 2018 2019 2020 Sources: BLS & ATA
2010 2011 2012 2013 2014 2015 2016 2017 2018 2010 2011 2012 2013 2014 2015 2016 2017 2018 Single-Family Housing Starts Will Continue Their Upward Climb 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5 Total Housing Starts (Monthly; Annualized Rate; Millions) 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 Single-Family vs Multi-Family Units (Monthly; Annualized Rate; Millions) Single-Family Multi-Family 0.4 0.0 Sources: Census & ATA 2016 2017 2018 2019 2020 H.S. 1.18 M 1.21 M 1.28 M 1.37 M 1.45 M
2010 2011 2012 2013 2014 2015 2016 2017 2018 2010 2011 2012 2013 2014 2015 2016 2017 2018 Factory Output is Stronger, But Outlook Recently Downgraded 110 105 100 95 90 Factory Output (Index) 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% Factory Output (Year-over-Year Percent) Sources: Federal Reserve & ATA 2016 2017 2018 2019 2020 Output -0.7% 1.5% 2.6% 2.6% 2.0%
Total Business Inventory-to-Sales Ratio (Data adjusted for seasonal, holiday, and trading-day differences, but not price changes) 1.55 1.50 1.45 1.40 1.35 Likely Optimal Range 1.30 1.25 1.20 1.15 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Source: Census Bureau
Freight Market
Total For-Hire TL Loads Index: January 2010=100; 3-Month Moving Average 120 115 110 105 100 95 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: ATA s Trucking Activity Report Includes Dry Van, Flatbed, Temp Controlled, and Tank Truck
8% 7% 6% 5% For-Hire Truckload Loads Growth Total TL Dry Van 6.4% 6.0% 5.4% 7.2% 4% 3% 2% 3.0% 2.1% 1% 0% 0.1% 0.8% 2016 2017 Q4 2017 YOY Jan-Jul 2018 YOY Source: ATA s Trucking Activity Report
For-Hire Truckload Loads Year-Over-Year Growth 2016 2017 Q1 2018 Jan-Jul 2018 Dry Van 0.8% 2.1% 5.7% 7.2% Temp Controlled -0.3% 5.0% -0.1% -8.8% Flatbed 5.2% 1.3% -8.7% -6.1% Tank Truck 0.0% -2.8% -3.2% -3.9% Short-Haul (<500 miles) 1.5% 2.4% 2.8% 3.4% Long-Haul (>1,000 miles) 1.7% 7.8% 6.1% 4.1% Source: ATA s Trucking Activity Report
Total For-Hire TL Miles Index: 2010=100; Seasonally Adjusted; 3-Month Moving Average 110 105 100 95 90 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: ATA s Trucking Activity Report Includes Dry Van, Flatbed, Temp Controlled, and Tank Truck
Source: ATA s Trucking Activity Report Dry Van Truckload Average Length-Of-Haul Continues to Fall
2010 2011 2012 2013 2014 2015 2016 2017 2018 2010 2011 2012 2013 2014 2015 2016 2017 2018 For-Hire Truckload Revenue 125 120 115 110 105 100 95 90 85 Revenue (Index; 2015=100) 20% 15% 10% 5% 0% -5% Revenue (Year-over-Year Percent) 80-10% Excludes FSC Revenue Source: ATA s Trucking Activity Report
For-Hire Truckload Revenue Year-Over-Year Growth 2016 2017 Q1 2018 Jan-Jul 2018 Dry Van -4.4% 0.7% 15.1% 20.5% Temp Controlled -5.2% 4.8% 13.8% 14.6% Flatbed -0.2% 2.0% 9.1% 11.5% Tank Truck -0.6% 0.7% 3.3% 5.6% Short-Haul (<500 miles) -0.5% 3.5% 18.1% 23.4% Long-Haul (>1,000 miles) -18.2% 15.8% 8.8% 15.2% Excludes FSC Revenue Source: ATA s Trucking Activity Report
LTL Tonnage Index: 2010=100; 3-Month Moving Average 150 145 140 135 130 125 2014 2015 2016 2017 2018 Source: ATA s Trucking Activity Report
5% LTL Tonnage Growth 4% 3.8% 3.9% 3% 2% 1.7% 1% 1.0% 0% 2016 2017 Q4 2017 YOY Jan-Jul 2018 YOY Source: ATA s Trucking Activity Report
2015 2016 2017 2018 2015 2016 2017 2018 U.S. Bank Quarterly Trucking Freight Payment Indexes 130 125 120 115 110 105 100 95 90 85 80 Shipments (Index; 2015=100) 130 125 120 115 110 105 100 95 90 85 80 Spend (Index; 2015=100) 75 75 Source: U.S. Bank
Industry Capacity Remains Very Constrained
US Retail Class 8 Truck Sales Thousands 300 250 200 150 100 50 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Includes Tractors & Straight Trucks Source: ATA s American Trucking Trends 2018 & ACT Research
US Active Population Class 8 Truck Age Years 7.0 6.5 6.0 20-year average 5.5 5.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Includes Tractors & Straight Trucks Source: ACT Research
US Class 8 Tractor Exports Units 25,000 20,000 15,000 20-year average 10,000 5,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* * 2018 is a YTD annualized rate Source: Census Bureau
Top Importers of U.S. Used Tractors 2007 2017 19% 28% 26% 25% 5% 10% 13% 25% 6% 10% 14% 19% Russia Mexico Nigeria Canada Panama Others Mexico Vietnam Guatemala Nigeria Canada Others
7.0% 5.0% 3.0% 1.0% For-Hire TL Tractor Changes: Large vs Small Fleets Includes company tractors and independent contractor equipment 2016 2017 2018 YTD 5.1% -1.0% -3.0% -1.5% -0.2% -0.6% -5.0% -7.0% -5.0% -5.0% Large TLs Small Fleet: Less than $30 million in annual revenue Small TLs Source: ATA s Trucking Activity Report 2018 data is through July
2015 2016 2017 2018 For-Hire Truckload Tractor Data 15% 10% Company & I.C. Power Units (Year-over-Year Percent) Large TL Small TL 5% 0% -5% -10% Source: ATA s Trucking Activity Report
Large TLs: Company Tractors vs Independent Contractor Equipment Index: January 2017=100 105 Company I.C. Trough to Peak: +3.6% 100 Peak to Trough: -3.9% 95 2017 2018 Source: ATA s Trucking Activity Report
Small TLs: Company Tractors vs Independent Contractor Equipment Index: January 2017=100 105 Company I.C. 100 Trough to Peak: +3.2% Peak to Trough: -2.5% 95 2017 2018 Source: ATA s Trucking Activity Report
105 2016 2017 2018 LTL Truck Counts (Index: 2015 = 100) 100 2018 YTD +0.1% over same period in 2017 95 90 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: ATA s Trucking Activity Report
For-Hire TL & LTL Pricing Proxies Year-Over-Year Growth 2016 2017 Q1 2018 Jan-Jul 2018 Dry Van -3.4% 0.1% 16.0% 18.5% Temp Controlled 1.6% 3.4% 9.5% 13.1% Flatbed -3.0% 2.3% 10.9% 11.7% Tank Truck -1.7% 4.5% 12.8% 16.5% Short-Haul (<500 miles) -0.6% 2.0% 16.6% 18.2% Long-Haul (>1,000 miles) -15.4% 3.7% 12.3% 13.6% LTL 1.4% 0.0% 5.2% 6.5% Source: ATA s Trucking Activity Report Truckload: Average Revenue per Mile LTL: Average Revenue per Ton Excludes FSC Revenue
For-Hire Truckload Revenue per Mile 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% Year-Over-Year Growth Source: ATA s Trucking Activity Report Includes Dry Van, Flatbed, Temp Controlled, and Tank Truck Excludes Fuel Surcharges
The Driver Situation Remains Very Difficult
Truck Driver Turnover Rates 100% 75% 98% 82% 96% 95% 79% 90% 93% Large TL Small TL LTL 87% 79% 81% 78% 79% 96% 98% 73% 72% 50% 25% 9% 11% 11% 11% 9% 9% 12% 14% 0% 2012 2013 2014 2015 2016 2017 1H 2018 Q2 2018 Source: ATA All rates are annualized
The driver shortage is primarily an over-the-road for-hire truckload issue. So how many drivers are in that space? 10 Million CDL Holders 3.5 Million Truck Drivers 1.7 Million Heavy & Tractor-Trailer Drivers 870,000 For-Hire Trucking Heavy & Tractor-Trailer Drivers Based on government data, ATA estimates that there are roughly 500,000 OTR for-hire TL drivers. Source: U.S. Department of Labor
Driver Shortage 51,000 Source: ATA s Truck Driver Shortage Analysis 2017
Thousands of Jobs 450 400 Jobs Created by Industry Since January 2017 400 420 350 300 250 200 150 100 50 0 Manufacturing Construction For Hire Trucking 30 Source: Department of Labor
Source: ATA s 2017 Driver Compensation Study ATA Driver Compensation Study
WHAT ELSE CAN BE DONE? DRIVE-Safe Act Improve driver efficiency/driving time Reduce driver waiting times 8,500/month to 9,000 = 5.9% 8,500/month to 9,500 = 11.8% Female Drivers
Download ATA s Report for Free at: http://trck.ng/drivershortage
The Long-Run Looks Good Too
Growth in Tonnage 140% 130% 120% 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Total Increase from 2018 to 2029 2018 2029 Pipeline, 134% Air, 37% Rail Intermodal, 35% Trucking, 27% Waterborne, 16% Rail Carload, 5% Source: U.S. Freight Transportation Forecast to 2029
2029
Thanks! rsuarez@trucking.org