Overall U.S. freight tonnage will rise nearly 25% and revenues from that freight will surge above 70% over the next decade, per the latest long-term freight forecast released by the American Trucking Assns. (ATA).
The ATA U.S. Freight Transportation Forecast to 2025 predicts further growth not just for trucking industry, but for the entire freight economy, according to ATA chief economist Bob Costello.
“We continue to see growth for the entire freight economy– but we also see that trucking will maintain its position as the nation’s dominant mode of freight transportation,” Costello commented.
Forecast was produced by ATA in collaboration with IHS Global Insight.
ATA forecasts that trucking’s market share of tonnage should expand to 70.9% in 2019 and to 71.4% by 2025 and that trucking’s share of total revenue from tonnage is estimated to reach 81.5% in 2025, vs 81.2% in 2013
Findings of the long-range freight outlook include:
Overall freight tonnage will grow 23.5% from 2013 to 2025 and freight revenues increase by 72%
Growth in overall freight volume is pegged at 2.8% per year from 2014 to 2019, then it tapers off to 1.0% during the next six years, through 2025
Trucking’s share of freight tonnage will increase from 69.1% in 2013 to 71.4% in 2025
Rail intermodal tonnage will grow 5.5% annually through 2019 and 5.1% a year through 2025— yet rail market share will shrink from 14.5% of all tonnage in 2013 to 13.8% in 2025
Forecast also breaks down freight movements regionally, by both percentage of inbound and outbound tonnage.
“Truck freight generated nearly $682 billion in revenue last year, which is a new record,” stated Costello in introductory remarks to Forecast.
“According to IHS Global Insight,” he continued, “total truck tonnage, including for-hire and private carrier operations, hit 9.68 billion tons in 2013, the highest level since 2008. As of last year, total tonnage was up 13.6% from the low in 2009.”
Costello remarked that “despite the slow [economic] recovery so far, the long-run [freight] outlook still remains bright for nearly all modes.”
He added that key contributors to the projected “robust growth” will involve “many factors,” including trends in manufacturing, consumer spending and international trade.
Trucking trends the report highlights:
Trucking will increase its share of the freight pool because trucks dominate the transportation of general commodities— and those will continue to grow at a faster rate than bulk commodities. Trucking will also gain from rising U.S. crude oil and natural gasproduction
As demand/production of key truck-oriented commodities improves, trucking’s market share of tonnage should expand to 70.9% in 2019 and to 71.4% by 2025
Trucking’s share of total revenue is estimated to reach 81.5% in 2025, vs 81.2% in 2013
Truckload volume will expand 3.5% per year from 2014 to 2019 and then by 1.2% per year from 2020 to 2025. This projection reflects the anticipated performance of key commodities and freight-market segments
Truckload carriers are seen as increasing their use of railroads to handle intermediate and long-distance trailer hauls through the forecast period
Less-than-truckload (LTL) volume is forecast to rise from 145.0-million tons in 2013 to 177.7-million tons in 2019 and then to 204.6-million tons in 2025— which would translate into an average annual growth of 3.8% from 2014 to 2019 and of 2.5% during 2020 to 2025
Private-carrier volume is expected to expand by 3.0% per year in 2014 to 2019 and then by 1.0% per year in 2020 to 2025
The private-carrier share of total transportation volume is forecast to “hold steady at 34.9% throughout the forecast period– compared with 34.4% in 2013
The 75-pg report sums up the basis for its rosy forecast by pointing to numerous positive factors that are expected to play out over the next eleven years.
For starters, Forecast expects U.S GDP to improve in the years ahead, with growth of 2.9% realized in 2014 to 2019 and of 2.4% in 2020 to 2025.
“The domestic economy remains the driving force behind the performance of the nation’s freight pool, with foreign trade playing a secondary, but significant and growing role,” the report’s authors assert.
What’s more, they contend that “if we are right about the future path of the U.S. and global economy, the nation’s freight pool could grow by 23.5% over the 12 years from 2014 through 2025.”
More specifically, per the report, a “cyclical snapback” in housing and construction from 2014 to 2016 will help support freight tonnage growth of 16.6% from 2014 to 2019. In addition, it noted that general commodities will continue to expand at a “faster pace” than bulk commodities.
As for the negative side of things, the authors of Forecast point out that, “Healthy long-term growth in the United States cannot be maintained without healthy spending on the transportation infrastructure, state-of-the art equipment, and technology.”
They conclude by stating that their forecast “remains vulnerable to ‘shocks to the system,’ such as a territorial dispute with China involving its neighbors or the United States; a worsening of the already dicey situation in the Middle East; an oil supply crisis that would send crude-oil prices spiraling higher, or [the occurrence of] major natural disasters.”