The data-rich U.S. Freight Forecast to 2024,just released by the American Trucking Assns. (ATA), projects an overall increase in freight volumes over the next decade for all modes of over 20%. What’s more, the report forecasts that trucking’s share of that tonnage will climb from where it was at 68.5% in 2012 to 70.8% by 2024.

 “This forecast begins with a 2012 baseline and then projects the amount of tonnage to be hauled by 2024, the revenue collected from those volumes by mode, as well as the number of trucks needed to move the freight,” pointed out Bob Costello, ATA vp & chief economist. He noted the long-range forecast is produced by ATA in concert with IHS Global Insight and Martin Labbe Associates.

Costello said the report shows that trucking “continues to dominate” freight transportation in terms of both tonnage and revenue, as it comprised 68.5% of tonnage and almost 81% of revenue in 2012.

“Although freight has been recovering since 2010, total freight tonnage was still off 12 percent in 2012 from 2006,” he remarked. “As of last year, total tonnage was up 8.2% from the low in 2009. Also in 2012, truck tonnage was up 10.3% from the low in 2009, but still off 12.7% from the high in 2006.

“Despite the slow recovery,” Costello continued, “the long-run outlook still remains bright for all modes. Total freight tonnage is projected to grow 21% over the forecast period, while total freight transportation revenue is forecasted to jump 63.6% by 2024.”

He said this edition of the forecastidentifies the key contributors to this robust growth, such as manufacturing, consumer spending and international trade.

According to ATA, the forecast projects that:

  • Overall freight revenue will grow by 63.6% to $1.3 trillion annually in 2024; and trucking will see its share of those revenues rise to 81% from 80.7% in 2012.
  • Truckload volumes will grow 3.2% through 2018 and 1.1% annually between 2019 and 2024. Less-than-truckload volume should grow 3.5% annually through 2018 and by 2.4% until 2024.
  • Intermodal rail will continue to be the fastest growing freight mode, growing an average of 5.1% a year until 2018 then slowing moderately to 4.8% annual through 2024.
  • Other modes of transportation, including air freight, waterborne transportation and pipelines will see moderate volume and revenue growth. 
  • Anemic growth for rail carloads of just 1.5% through 2018 and 0.4% from 2019 through 2024 contributing to a decline in market share to 14.2% from 14.8% in 2011.

 

Looking at overall growth ahead, the forecast finds that the total tonnage from primary freight shipments in the U.S. will rise from an estimated 13.72-billion tons in 2012 to 16.54-billion tons in 2024. That adds up to a jump of 20.5% over the next 12 years.

Meanwhile, the total revenue derived from primary freight shipments in the U.S. will climb by a whopping 63.6%, from an estimated $795.7 billion in 2012 to $1.3 trillion in 2024.

General freight will rise at an average annual rate of 3.5% during 2013–18 and then go up 1.6% per year thereafter. Bulk freight will grow more slowly, increasing 1.8% per year from 2013 to 2018 and then by 0.4% per year.

General freight will comprise 42.3% of all primary shipments by weight by 2024, up from 38.4% in 2012. But bulk tonnage will account for 57.7% of all primary shipments by 2024, down from 61.8% in 2012.

ATA said the forecast reveals these trucking-specific trends:

  • Trucks will increase their share of the freight pool. Trucks dominate the transportation of general commodities, which will continue to grow at a faster pace than bulk commodities.
  • Trucks’ share of total tonnage will rise from 68.5% in 2012, to 70.4% in 2018 and 70.8% by 2024. Trucks’ share of total revenue is estimated at 81.0% in 2024, vs. 80.7% in 2012.
  • Truckload volumes will expand 3.2% per year from 2013 to 2018, and 1.1% per year from 2019 to 2024. Truckload tonnage growth reflects the anticipated performance of key commodities and freight-market segments. We expect truckload carriers to increase their use of railroads to handle intermediate and long-distance trailer hauls as we move through the forecast period.
  • Less-than-truckload (LTL) volume is forecast to rise from 142.6-million tons in 2012 to 172.5-million tons in 2018 and 197.8-million tons in 2024. This translates into average annual growth of 3.5% from 2013–18, and 2.4% during 2019–24.
  • Private-carrier volume is slated to expand 2.7% per year in 2013–18, and 0.8% per year in 2019–24. The private-motor-carrier share of total transportation volume will hold steady at 34.5% in both 2018 and 2024; compared with 34.0% in 2012.

The report also includes a detailed look at where U.S. Gross Domestic Product (GDP) growth is headed. ATA projects it will improve with growth of 2.8% in 2013-18 and then of 2.4% in 2019-24—“faster than the grow rates achieved in 2011 and 2012.”

The forecast holds that the domestic economy remains the “driving force behind the performance of the nation’s freight pool.” But while foreign trade plays a secondary role, it will be a “significant and growing” one. The report also indicates that general commodities will continue to expand at a faster clip than bulk commodities.

“If we are right about the future path of the U.S. and global economy,” stated the forceast’s authors, “the nation’s freight pool could grow by 20.5% over the 12 years from 2013 through 2024. A cyclical snapback in housing and construction and a bounce-back in grain and coal production following a disastrous 2012 will help support growth of 14.7% from 2013 to 2018.”

ATA did allow that the forecast is vulnerable to “shocks to the system, such as a territorial dispute with China involving its neighbors or the U.S, a worsening of the situation in the Middle East, an oil supply crisis that would send crude-oil prices spiraling higher, or major natural disasters, such as [another] Hurricane Sandy.”

The forecasters also observed that as the “transport landscape becomes more and more complex, shippers will step up their demands for low-cost/high-quality/flexible/problem-free transportation services.  Transportation-service providers will have to respond accordingly, or lose market share. Competition within the freight transportation industry will only intensify in the years ahead. “

To be sure, trucks will keep on dominating the overall freight-transportation market—as they will account for almost 71% of total primary tonnage by 2024. 

Rail will continue its dominance of larger-capacity, longer-haul freight movements particularly bulk freight. But environmental pressures and competition from natural gas will take a toll on coal demand and production and thus “dampen the performance” of rail carload traffic during the forecast period.

On the other hand, rail intermodal will post the strongest growth rates through 2024 due to above-average growth in foreign trade, domestic containerization and the expanded use of rail intermodal service by major trucking companies.

The forecast noted that the capacity expansion of the Panama Canal will “eventually have an impact on the performance of eastern vs. western railroads and regional for-hire motor carriers. Commercial transits there are slated to begin in mid-2015.

Elsewhere off the roads and rails, the forecast finds that expansion of waterborne commerce will be “limited by slow-growing commodities, such as petroleum, coal and grain” and increased pipeline movements of oil coming into the U.S. from Canada.”

Pipeline will be the slowest growing of all modes through 2018. But it will benefit from increased Can/Am oil production and the expansion of chemical industry ethylene capacity resulting from the surge in shale gas production.

And air freight should benefit from healthy growth in various time-sensitive, high-value goods, such as electronics, small-package shipments, specialty capital goods and medical and research instruments.

“The United States achieved economic greatness with the help of an evolving state-of-the-art transportation system,” the authors of the forecast summed up. “Continued healthy transportation system spending on infrastructure, state-of-the art equipment and technology will be required to move the economy forward at a healthy pace.”