In a recent survey of Minnesota-based trucking fleets, some 60% said they expect modest economic growth to continue in 2013, which in turn is convincing some of them to add capacity to their operations next year.
Conducted by the Minnesota Trucking Assn.(MTA) back in October, the survey indicates 40% of Minnesota-based trucking fleets expect to increase their fleet size in 2013 between 1% and 5%, with 70% of poll respondents saying they plan to purchase replacement equipment next year.
That confidence stems in part from relatively good freight volumes experienced in the state this year, noted MTA President John Hausladen.
He said that freight shipments being delivered to Minnesota increased by 3.7% so far in 2012, while freight shipments originating in Minnesota and being delivered elsewhere grew by 4.1%. As a result, Hausladen noted that Minnesota trucking fleet sizes grew by an average of 1.9% in 2012.
To some degree, those upticks are not too surprising, as over 68% of Minnesota communities depend exclusively on trucks to move their goods, he noted, with truck transportation representing 85% of all freight movement by weight in and out of Minnesota.
“This survey suggests that trucking capacity in Minnesota will continue to grow modestly during 2013,” Hausladen pointed out. “Even so, a majority of Minnesota truckers are planning to hold both driver and non-driver hiring constant during the next twelve months.”
That could be because the broader freight picture in the U.S. remains somewhat cloudy as freight volumes nationwide stayed on a decelerating path in October.
Peter Nesvold, an equities analyst and transportation expert with Wall Street firm Jefferies & Co., noted that truck tonnage decelerated in October after recording 2.4% year-over-year growth in September and 3.1% year-over-year growth back in August – adding that that loads also faded in October after showing signs of life in September.
Nesvold added that weekly diesel consumption trends in the first two weeks of October also pointed to a slowdown in overall freight flows and industrial production.
“Weekly diesel consumption, which is highly correlated with overall freight flows and industrial production, is one of the key freight indicators that we track,” he explained. “Thus this latest reading is consistent with our channel checks that suggest the late-September momentum in freight demand stalled in early October.”