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General Session 2 Data Driving Your Recruiting & Retention Decisions Bob Costello, Chief Economist & Senior VP, American Trucking Association
Bob Costello ATA Chief Economist & Senior Vice President
Duration and Strength of Recent Expansions Q4:1982 Q3:1990 (4.3%) Q1:1991 Q1:2001 (3.6%) Q1:1975 Q1:1980 (4.3%) Q4:2001 Q4:2007 (2.8%) Q2:2009-today (2.2%) (Average annual change in GDP by expansion) Q3:1980 Q3:1981 (4.4%) Expansion in Quarters Sources: ATA, BEA, WSJ and NBER
Quarterly Real GDP & Forecasts 6% 5% 5.0% 2015 2016 2017 2018 2.6% 1.6% 2.3% 2.7% 4% 4.0% 3.5% 3% 2% 2.3% 2.0% 2.6% 2.0% 1.4% 1.9% 2.1% 2.2% 2.8% 2.5% 1% 0.9% 0.8% 0% -1% -2% -1.2% Q1 2014 Q1 2015 Q1 2016 Q2 2017 Sources: BEA & ATA
2014 2015 2016 2017 2014 2015 2016 2017 350 300 250 200 150 100 50 Monthly Job Changes (Thousands) Job Market 7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 Unemployment Rate (Percent) 0 3.0 2015 2016 2017 2018 5.3% 4.9% 4.6% 4.3% Sources: BLS & ATA
Real Personal Disposable Income Growth 4% 3.5% 3.5% 3% 3.1% 2.7% 2.7% 2% 1.6% 1% 0% Avg 2000-2007 Avg 2010-2014 2015 2016 2017 Avg 2018-2019 Sources: BEA & ATA
Real Personal Consumption Growth (Goods Only) 5% 4% 4.1% 3.3% 4.0% 3.6% 3.9% 3.9% 3% 2% 1% 0% Avg 2000-2007 Avg 2010-2014 2015 2016 2017 Avg 2018-2019 Sources: BEA & ATA
2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016 Housing Starts Are Leveling Off At a Sustainable Pace 1.400 1.300 1.200 1.100 1.000 0.900 0.800 0.700 0.600 0.500 Housing Starts (Monthly; Annualized Rate; Millions) 1.400 1.300 1.200 1.100 1.000 0.900 0.800 0.700 0.600 0.500 New Permits (Monthly; Annualized Rate; Millions) 0.400 0.400 2015 2016 2017 H.S. 1.11 M 1.17 M 1.23 M Sources: Census & ATA
4% Factory Output 3% 3.0% 2.6% 2% 2.0% 1% 1.1% 1.2% 0.3% 0% Avg 2000-2007 Avg 2010-2014 2015 2016 2017 Avg 2018-2019 Sources: Federal Reserve & ATA
Factory Jobs vs Factory Output Index; January 1990 =100 200 Jobs 190 180 Output 170 160 +75% 150 140 130 120 110 100 90 80-31% 70 60 50 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Sources: Department of Labor, Federal Reserve and ATA
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 1.30 Likely Optimal Range 1.25 1.20 1.15 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Source: Census Bureau
Freight Trends
Total TL Loads Index: 2000=100; 3-Month Moving Average Includes Dry Van, Flatbed, Temp Controlled, and Tank Truck Source: ATA s Trucking Activity Report
8% Truckload Loads 7% 6% 6.2% 5% 4% 3% 2% 2.6% 2.0% 1% 0% 0.9% 1.0% 0.1% Avg 1995-1999 Avg 2000-2007 Avg 2010-2014 2015 2016 2017 Source: ATA
Source: ATA s Trucking Activity Report LTL Tonnage Index: 2000=100; 3-Month Moving Average
8% LTL Tonnage 7% 6% 5.7% 5% 4.4% 4% 3% 2% 1% 1.9% 0.9% 1.1% 0% -1% -2% Avg 1995-1999 Avg 2000-2007 Avg 2010-2014 2015 2016 2017-0.7% Source: ATA
Capacity Trends
US Retail Class 8 Truck Sales Thousands 300 250 200 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Includes Tractors & Straight Trucks Source: ATA s American Trucking Trends 2016 & ACT Research
5% Truckload Tractor Fleet Changes 4% 3% 2% 1.8% 1.9% 1% 0% -1% -0.2% 0.9% 0.1% -2% -3% -4% -5% -3.9% 2010 2011 2012 2013 2014 2015 2016-2.0% Source: ATA
10% LTL Truck Fleet Changes 5% 1.7% 4.0% 5.6% 0% -1.7% -0.2% -5% -4.3% -10% -11.0% -15% 2010 2011 2012 2013 2014 2015 2016 Source: ATA
Driver Trends
Truck Driver Shortage Does not account for future regulations or quality issues. Source: ATA s Truck Driver Shortage Analysis 2015
100% 90% 80% Truckload 83% LTL 98% 98% 95% 93% 84% 70% 60% 50% 52% 40% 30% 20% 10% 9% 8% 8% 11% 12% 11% 10% 0% 2010 2011 2012 2013 2014 2015 2016 2016 is the annualized rate for the Q1-Q3 period. Source: ATA s Trucking Activity Report
Source: ATA s Trucking Activity Report
Dry Van Average Length-Of-Haul is Down 796 miles Source: ATA
Average Number of New Drivers Needed Per Year Over the Next 10 Years: 89,000 Voluntary Non- Retirement Departures 11% Non-Voluntary Departures 7% Industry Growth 34% Retirements 48% Source: ATA Benchmarking Guide for Driver Recruitment & Retention
Impact of ELDs 1. Truckstop.com survey of 1,300 carriers, with vast majority operating fewer than 6 trucks, 84% had no ELDs on any trucks. Less than 50% of trucks have ELDs and it is likely less than 40%. 2. TL fleets that have already adopted are generally larger and more sophisticated than most of those that haven t. So, productivity impact could be larger than fleets have seen so far. 3. What if just 1% to 3% of drivers leave the market for a host of reasons, including cheaters, anti-technology, anti-big government, or just don t want to change? 4. Some carriers are likely to exit the industry.
Annual Employee Driver Compensation 2013 Median Pay Including Incentives and Bonuses TL Nat'l Irregular Route Van $46,084 Flatbed Van Dedicated $50,000 $50,800 LTL Local P&D All Carriers Tank Truck OTR Refrigerated $54,585 $55,000 $56,000 LTL OTR Private: Non-Van $63,000 $65,000 Private: Van Only $73,000 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000 *Solo Drivers Only
Carriers Utilize Multiple Base Pay Packages 1% 76% of companies pay employee drivers two or more ways 12% 23% One Type of Base Pay Two Types of Base Pay 21% Three Types of Base Pay Four Types of Base Pay Five Types of Base Pay 42%
Know where you stand. Know where you can improve. Source: Strategic Programs, Inc.
Demand for Drivers Will Remain High
All Modes of Freight Transportation Will Grow Total Increase in Tonnage from 2015 to 2027 Source: U.S. Freight Transportation Forecast to 2027
Distribution of Tonnage by Mode: 2015 vs 2027 Air 0.1% Truck 70.1% Rail Carload 12.5% Rail Intermodal 1.6% Water 4.5% Truck 66.4% Pipeline 10.4% Water 5.6% Pipeline 17.4% Air 0.1% Rail Intermodal 1.3% Rail Carload 10.0% 2015 2027 Source: U.S. Freight Transportation Forecast to 2027
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