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Trucking Industry & Driver Update
March 2018
Bob Costello
Chief Economist & Senior Vice President
American Trucking Associations
Real Gross Domestic Product Growth
2.7%
2.1%
2.9%
1.5%
2.3%
2.7% 2.7%
0%
1%
2%
3%
4%
Avg 2000-2007 Avg 2010-2014 2015 2016 2017 2018 2019
Sources: BEA & ATA
Forecasts Notes: • New tax law adds 0.3 percentage points in 2018• 4 interest rate hikes in 2018
Drivers of Truck FreightThe 3.5 Buckets of Freight
Job Market
0
50
100
150
200
250
300
350
400
201
4
201
5
201
6
201
7
201
8
Monthly Job Changes(Thousands)
Sources: BLS & ATA
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
201
4
201
5
201
6
201
7
201
8
Unemployment Rate(Percent)
2015 2016 2017 2018
5.3% 4.9% 4.4% 3.9%
Employment Costs
3.2%
1.8%
2.3% 2.4%2.6%
2.9%
3.3%
4.7%
2.5%
1.6% 1.6%
2.2% 2.2%
2.6%
0%
1%
2%
3%
4%
5%
Avg 2000-2007 Avg 2010-2014 2015 2016 2017 2018 2019
Wages & Salaries
Benefits
Sources: BLS & ATA
Real Personal Consumption Growth(Goods Only)
3.3%
4.6%
3.7%3.9%
4.6%
2.5%
0%
1%
2%
3%
4%
5%
Avg 2010 - 2014 2015 2016 2017 2018 2019
Sources: BEA & ATA
Single-Family Housing Starts Will Continue Their Upward Climb
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
Total Housing Starts(Monthly; Annualized Rate; Millions)
2015 2016 2017 2018 2019
H.S. 1.11 M 1.18 M 1.21 M 1.29 M 1.40 M
Sources: Census & ATA
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
Single-Family vs Multi-Family Units(Monthly; Annualized Rate; Millions)
Single-Family
Multi-Family
Factory Output is Improving
90
95
100
105
110
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
Factory Output(Index)
Sources: Federal Reserve & ATA
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
Factory Output(Year-over-Year Percent)
2015 2016 2017 2018 2019
Output 0.2% 0.2% 1.7% 3.3% 3.0%
Source: Census Bureau
Total Business Inventory-to-Sales Ratio(Data adjusted for seasonal, holiday, and trading-day differences, but not price changes)
Likely Optimal Range
1.15
1.20
1.25
1.30
1.35
1.40
1.45
1.50
1.55
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Source: American Trucking Associations’ Economics Department
13,36617,988
31,3546,683
8,994
15,677
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Canada Mexico Total
2017 U.S. Trucking Employment From Truck Transported NAFTA Trade
Non-Drivers
Drivers
26,981
20,234
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
Canada Mexico Total
2017 U.S. Trucking Revenue From Truck Transported NAFTA Trade (Billions)
$3.81
$2.81
47,031 $6.62
The Economic Risks to Trucking: Trade Wars
Source: Department of Labor
U.S. Manufacturing EmploymentMillions of Employees
10
12
14
16
18
20
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
2000 China joins the WTO: Manufacturing employment falls by 3.9 million 2000 - 2007
1994 NAFTA Starts: Manufacturing employment increased by 500,000 from 1994-2000
Drivers of Truck Freight
Source: ATA’s Trucking Activity Report
Total For-Hire TL LoadsIndex: January 2010=100; 3-Month Moving Average
Includes Dry Van, Flatbed, Temp Controlled, and Tank Truck
Truckload Loads
2.6%
1.0%
0.1%
3.0%
0%
1%
2%
3%
4%
Avg 2010-2014 2015 2016 2017
Source: ATA
For-Hire Truckload Loads
0.1%
3.0%
6.0%
0.8%
2.1%
6.4%
-0.3%
5.0%
5.9%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
2016 2017 Q4 2017 YOY
Total TL
Dry Van
Temp Control
Source: ATA
Source: ATA’s Trucking Activity Report
Total For-Hire TL MilesIndex: 2010=100; Seasonally Adjusted; 3-Month Moving Average
Includes Dry Van, Flatbed, Temp Controlled, and Tank Truck
Source: ATA
Dry Van Truckload Average Length-Of-Haul is Down
796 Miles
527 Miles
Source: ATA’s Trucking Activity Report
LTL TonnageIndex: 2010=100; 3-Month Moving Average
LTL Tonnage
5.7%
1.0%
-0.8%
1.4%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
Avg 2010-2014 2015 2016 2017
Source: ATA
Industry Capacity
Source: ATA’s American Trucking Trends 2016 & ACT Research
US Retail Class 8 Truck Sales
Includes Tractors & Straight Trucks
Thousands
-7.0%
-5.0%
-3.0%
-1.0%
1.0%
3.0%
5.0%
7.0%
Large TLs Small TLs
-0.2%
4.0%
-5.0%
5.1%
-5.0%
-0.2%
2015
2016
2017
Small Fleet: Less than $30 million in annual revenue
TL Tractor Changes: Large vs Small Fleets
Source: ATA’s Trucking Activity Report
Includes company tractors and independent contractor equipment
TL Truck Counts(Index: 2015 = 100)
Source: ATA’s Trucking Activity Report
LTL Truck Counts(Index: 2015 = 100)
Source: ATA’s Trucking Activity Report
Source: ATA’s Trucking Activity Report & DAT.com
Rates and Rate Proxies: Contract vs SpotIndex: January 2010=100; 3-Month Moving Average
Includes Dry Van, Flatbed, Temp Controlled, and Tank TruckContract = For-Hire Truckload Average Revenue per Mile x FSC
Driver Situation
Source: ATA
50% 52%
83%
98% 96% 95% 93%
81%86%
8% 9% 8% 9% 11% 11% 11% 9% 8%0%
25%
50%
75%
100%
2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD
TL LTL
Truck Driver Turnover RatesTL Q3 2017: 95%
10 Million CDL Holders
3.5 Million “Truck” Drivers
1.7 Million Heavy &Tractor-Trailer Drivers
864,000 For-Hire Trucking Heavy &
Tractor-Trailer Drivers
Driver Shortage
Source: ATA’s Truck Driver Shortage Analysis 2017
Source: ATA’s Truck Driver Shortage Analysis 2017
So When Will the Current Tight Capacity Market End?
What Can Shippers Do?
Thanks
Twitter: @ATAEconBob