TRUCKING MARKET ANALYSIS * USA - Truckers prosper despite rising diesel prices

The Dow Jones U.S. / Trucking Index: has actually outpaced the S&P 500 with a 26% rally

San Francisco,CAL,USA -MarketWatch, by Shawn Langlois -9May 2011: ... For the trucking industry, which is responsible for moving 68% of freight across the country, fuel is expense number one, surpassing even employee costs as the price of diesel continues to build... As it stands, diesel averages about $4.12 in the U.S., up 32% from a year ago. Not quite as bad as gasoline, but enough to send truckers scrambling to offset the cost side with price hikes... Take food hauler Sysco Corp., which reported earnings Monday. The company has managed to improve its profitability as it walks a tightrope of passing on price increases enough to make money, but not too much to send customers elsewhere. It’s a trend seen across the trucking industry during the first quarter. Same formula held true for the likes of Con-Way Inc. and Expeditors International of Washington... Fuel prices rise. Surcharges and higher rates more than offset those increases. Profit improves...   And investors take notice by buying up shares.  In the past year, the Dow Jones U.S. Trucking Index has actually outpaced the S&P 500 with a 26% rally in the face of these nosebleed diesel prices. The S&P benchmark has gained 21%... And if the economic recovery continues to take hold, any relief at the pump could mean more bottom-line improvements for companies that use trucks to distribute goods across the country...

* USA - FTR’s Trucking Conditions Index continues upward trend

Nashville,IND,USA -The Trucker News -9 May 2011: -- FTR’s Trucking Conditions Index rose to 13.30 in March from a February reading of 9.92, as reported in the May Trucking Update. A key driver for the improvement in the TCI was the ability of carriers to garner higher rates as industry capacity tightened... The Trucking Conditions Index is a compilation of factors affecting trucking companies and has been rising steadily since October 2010. Any reading above zero indicates an adequate trucking environment with readings above 10 a sign that volumes, prices and margin are in a good range for trucking companies... Demand for truck transport is growing at a normal rate for this point in the economic recovery, FTR President Eric Starks noted...

TRUCKING MARKETS * USA & Canada

* USA - Celadon’s Chief: Abrupt Capacity Shortage Threatens Trucking,  Warns

Princenton,NJ,USA -Transport Topics, by Dan Leone -9 May 2011: --   There could be an “instantaneous capacity shortage” in the United States this year or next because of a “perfect storm” fed by an aging, shrinking truck fleet and a lack of good drivers, said Paul Will, president and chief operating officer of Celadon Group...  The convergence of these economic storm fronts will “result in the tightest transportation market we’ve seen,” Will said May 4 in a keynote address at ALK Technologies’ annual summit...  Will cited an expected tightening in the driver workforce, exacerbated by the introduction of the federal Compliance, Safety, Accountability rating program late last year, and a U.S. truck fleet that is close to 6.7 years in age...  Moreover, Will said, only large fleets appear to be buying trucks, and those carriers’ shopping lists are limited because truck makers appear to have a kink in their supply chain. OEMs “can’t ramp up production because they can’t get their suppliers to ramp up,” Will said. “We see that when we buy trucks and trailers” ...  Fuel costs have soared in the past six months, and Will said that some small truckers have found themselves forced to use credit lines to fund working capital needs — thus preventing them from using their credit toward buying new trucks... One smaller fleet operator who attended the ALK show said that the perception that small- and medium-size fleets were older than large fleets wasn’t exactly correct...


* Canada - Show profitable growth in final quarter of 2010

OTTAWA,ONT,CAN -Truck News, by Lou Smyrlis -5 May 2011: -- The operating profit of trucking companies improved 19% in the fourth quarter of 2010 compared with the same quarter in 2009, according to Statistics Canada's new quarterly trucking survey...  Operating revenue (+10%) increased more than operating expenses (+9%). Fourth quarter profit reached $1.2 billion on revenue of $10.8 billion and expenses of $9.6 billion, the survey results, released today, indicate...  Salaries and wages expenses increased 3% to $2.5 billion in the fourth quarter compared with the same quarter in 2009. Vehicle fuel expenses rose more rapidly (+14%) but, at $1.9 billion, remained a smaller component of total expenses. Most of the increase in fuel expenses was a result of higher prices, as fuel consumption rose 5%...  During 2010, trucking companies experienced year-over-year increases in quarterly profits averaging 26%, reflecting the general economic upturn. Quarterly revenue increased 12%, on average, and outgrew expenses in each of the four quarters...

* USA - President and CEO FedEx Corporation: "We must electrify the transport sector"

Little Rock, Arkansas,USA -FT, by Frederick Smith, chairman, president and chief executive officer of FedEx Corporation -May 9, 2011: -- It is tempting to say that the headlines about rising fuel prices, Libya and other events in the Middle East will be a wake-up call to the dangers of oil dependence. But such calls have been repeated for almost 40 years, and yet the vulnerability – both in the US and across the globe – remains...  Every American recession over the past 35 years has been preceded by – or occurred concurrently with – an oil-price spike...  That price spike contributed greatly to the recession and financial crisis which the world is still struggling to recover from...  This addiction has also led the US to commit its young men and women in uniform to protecting the world’s oil infrastructure. And it means that western diplomacy is handicapped by the need to placate oil-producing nations, including those that do not share America’s views or values...

So what can be done? 

* First, the US should produce more oil at home. Increased safety and environmental standards must come hand-in-hand with this increased production, but such standards – along with stalled permit processes and endless litigation – must not stop the US from exploiting its domestic resources...   

* Second, America must continue on the path started by George W. Bush and continued by President Barack Obama to make cars, light trucks and commercial vehicles more fuel-efficient. The less oil used to drive the transport system, the less effect a price spike will have.

* Third: The Electrification Coalition, an organisation of which I am a member, has put forward a plan to deploy electric vehicles at scale throughout the US. These policies would cost far less over all of the years of their implementation than the hundreds of billions of dollars America sends overseas to pay for oil in a single year. In almost every conceivable area, the coalition’s plan represents a positive return on investment, from a $127bn improvement in the US balance of trade to millions of new jobs... (Photo: An USPS vehicle)

TRUCKING MARKETS * USA - Truckload Rates Seen Rising 5 to 10 Percent

New York,NY,USA -The Journal of Commerce Online, by William B. Cassidy -Feb 16, 2011: -- Motor carriers are keeping capacity tight in bid for price hikes, Longbow says...   Truckload carriers are seeking rate hikes ranging from 5 to 10 percent as annual contracts come up for renewal, Wall Street firm Longbow Research reports...   Carriers have "a high degree of confidence" that they will get those percentage increases, Longbow analyst J. Douglas Woodrich said in a Feb. 16 note to investors...  The investment research firm said tight control over capacity, federal safety regulations and lack of financing for new trucks will keep pressure on rates...  Truckload supply and demand reached "equilibrium" in January, according to Longbow. Demand was up 3.4 percent in the first month of 2011...  That's slow compared with double-digit increases for much of 2010, but an improvement over a 1.6 percent decline a year ago, the research firm said...

* USA - Truck freight volumes holding firm:  Record, a 62% year-over-year increase in TL freight availability

New York,NY,USA -Penton Media/Fleet Owner, by Sean Kilcarr -Feb 17, 2011: -- Near-term metrics indicate that freight volumes remain on the upswing, however the longer-term tonnage picture remains cloudy for trucking. According to TransCore’s North American Freight Index, the January truckload (TL) spot market notched a record amount in this metric’s 30-year history-- recording a 62% year-over-year increase in TL freight availability... Rates increased on the spot market for all truck types in January as well, according to TransCore’s Truckload Rate Index. Compared to January 2010, dry van rates increased by 14%, flatbed rates rose by 11% and refrigerated rates were up by 6%... Still, considering that January is typically a very slow month for truck freight, the numbers are better than average. The Ceridian-UCLA Pulse of Commerce Index (PCI), for example, fell 0.3% in January, giving up some, but retaining much of, December 2010’s 1.8% sequential gain. On a year-over-year basis, the PCI increased 3.4% in January-- making it the fourteenth straight month of year-over-year growth...

TRUCKING MARKET ANALYSIS * USA - LTL revenues benefit from improved pricing and increases in tonnage

Less-Than-Truckload carriers continued to focus on yields as opposed to market share

(Video from YouTube, by ConwayInc -5 Aug 2008: Life of a Con-way Truckload Driver)

Atlanta,GA,USA -Transport Intelligence (UK), by Cathy Roberson - 9 Feb 2011: -- Major LTL providers ABF, Con-Way and Old Dominion reported healthy revenue increases for the quarter: 19%, 5.6% and 28.3% respectively. A 4.7% decline was reported by YRC due to weakness in its National network as they continued to close facilities as well as lose customers in this segment. For those companies reporting positive revenue increases, all noted general rate increases implemented in the quarter were relatively successful as customers appeared to have accepted the increases. Tonnage increases also contributed to the rise in revenue... Improvements such as network realignments and pricing have been made, expenses will be a concern moving into the next few quarters. Carriers plan to reinstate wage increases and other benefits that were impacted during the recession. Rising cost of oil will also be a concern for carriers. For many though, the oil costs will translate into increased fuel surcharges that will be passed along to customers. Individually, ABF's ongoing legal case against the Teamsters will be a drag on operating expenses for the company... LTL industry focus for the next couple of quarters will continue to be on cost controls, pricing and operational improvements. An emerging trend observed in Q4 2010 was growth in guaranteed/expedited services. Although this was seen as a reaction to the tight inventory levels, look for carriers to promote and enhance these service offerings as a way to improve margins...