• Fasten your seat belts: We're in for a wild ride if current projections hold

    As has been our custom in January, we devote the following pages to a forward-leaning discussion of those key management issues, trends, and challenges likely to impact your operations in the coming year. Just as we were putting the finishing touches on our analysis of the top issues, a new forecast on the important -- and growing -- role of freight transportation hit my desk.Conducted by one of the
    Jan. 1, 1998
    3 min read

    As has been our custom in January, we devote the following pages to a forward-leaning discussion of those key management issues, trends, and challenges likely to impact your operations in the coming year. Just as we were putting the finishing touches on our analysis of the top issues, a new forecast on the important -- and growing -- role of freight transportation hit my desk.

    Conducted by one of the nation's top economic research firms, Standard & Poor's DRI, the report forecasts that the U.S. transportation industry will grow by nearly one-third over the next decade. Specifically, it will carry 13.2-billion tons of freight and generate $547.7 billion in revenue by the year 2006, according to the report. Those figures represent a 30% hike, or 2.7% annually, over 1996 revenues of $420.2 billion and a healthy 21% surge, or 2% annual growth, over the 10.9-billion tons hauled in 1996.

    That healthy trend line is predicated on an anticipated 3-5% annual rise in international trade. Much of that can be laid at the doorstep of our Mexican and Canadian neighbors.

    This plays right to the strength of trucking, since trucks dominate cross-border freight movements. Indeed, trucking should continue to capture the lion's share of the new U.S. freight growth -- 73% of volume and 79% of value.

    That, in turn, should help drive trucking's share of primary shipments from 60 to 63%. Measured by value, trucking is actually a bigger player.

    Trucking's share of the nation's freight bill will continue at nearly 82% in the year 2006, with $446.2 billion in gross revenues. That's up 29% over today's revenues.

    Not all carriers will participate equally in this buoyancy. For-hire trucking freight volume is projected to grow at 39% while private carriage is expected to grow at 13%. The report predicts that roughly 5% of the 1996 private motor-carrier tonnage will move to the for-hire segment by 2006.

    To handle the increased volume, there will need to be a 13% increase in the number of over-the-road tractors and trucks in Classes 6-8, said the report. Plus, these units are going to have to work harder. The total number of miles driven by these tractors and trucks can be expected to increase 27%, while the total volume of ton-miles will grow at a faster 32% clip.

    Air freight and intermodal rail shipments -- even though they represent barely more than an asterisk when it comes to calculating total transportation volume -- will see the greatest increases in growth. That can be attributed to the faster growth in the commodities that move in containers. However, even by the end of the forecast period, these modes will continue to comprise not much more than bigger asterisks.

    Not only did DRI report on modal shifts, it identified a shift from bulk commodities to general freight. Topping the list of the fastest growing commodity groups are electrical equipment, rubber, small packages, shipper association traffic, instruments, photo or optical equipment, transportation equipment, apparel, and fabricated metals.

    With the caveat that the person who gazes too much into the crystal ball usually ends up eating crunched glass, we present the critical choices for 1998.

    About the Author

    Tom Moore

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