“The continued rise of the freight transportation service index is evidence that America is moving towards economic recovery.” –Transportation Secretary Ray LaHood
So, after spending much of the week ruminating about energy, greenhouse gases, and the latest technological wonder project (preventing vehicle accidents from space, via satellite? I’m still a doubter on that one, I’m afraid), we circle back to the main ongoing issue in trucking today: the still-sickly freight market.
The question we’re all asking is, “When are things going to get better?” Well, the statistics, at least, are showing that things are getting better -- albeit at the pace of a garden slug. Not exactly a recipe for happiness and joy in anyone’s ledger, but maybe – just maybe – it’s a portent of better days ahead. And anything has got to be better than the anemic freight flows we’re experiencing now.
The latest bit of hopeful news comes from the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS), which reported this week that its Freight Transportation Services Index (TSI) rose 0.7% in August from its July level – the index’s second consecutive monthly increase.
[You can see why this isn’t exactly a “toss-the-hats-in-the-air” moment, for a paltry 0.7% rightly doesn’t elicit much cheering.]
BTS also reported that the Freight TSI has now gone four consecutive months without a decline after dropping in nine of the previous 12 months, and is the first four-month period without a decline in the index since 2002.
Just so we’re all on the same page: the Freight TSI measures the month-to-month changes in freight shipments in ton-miles, which are then combined into one index. The index measures the output of the for-hire freight transportation industry and consists of data from for-hire trucking, rail, inland waterways, pipelines and air freight.
[As you can see, this is an EXTREMELY broad measure of freight – almost too extreme, with the inclusion of pipeline data.]
The August Freight TSI reading of 96.2 is a 2.7% from the recent low of 93.6 reached in April – and April the index was at its lowest level since June 1997.
The index is also down 14.8% from its historic peak of 112.9 reached in May 2006, BTS said, with the 4.2% decline in the first eight months of 2009 the largest in the last decade, exceeding the 4% decline for the first eight months of 2000.
The freight index is also down 12.2% in the five years from August 2004 and down 6.5% in the 10 years from August 1999 – with all the five-year and 10-year declines took place consecutively in the past several months. Again, data points that don’t exactly lift the clouds of doom and gloom hovering over the heads of freight haulers today.
“There is still a long road ahead [so] we will not let this positive sign lull us into complacency,” noted Transportation Secretary Ray LaHood when the BTS released its freight index reading yesterday.
Complacency, though, isn’t the problem – survival is. And incremental improvements in freight flows, though welcome indeed, don’t amount to a full-fledged revival of the fortunes of trucking companies living of the fiscal edge of ruin, either.