USA Freight Industry Is Back

None of us have a crystal ball into the future, but as many of you know my career has been centered around the LAX Industrial Real Estate Market….and as I have stated before…as the freight industry goes…so goes the economy. If trade and freight continue on the upswing, the current economic ills will lessen and jobs will be created…will it happen overnite? of course not…but the report below…is a positive one…and let us hope it continues…when the warehouses  are filling up…its an economic indicator that bodes well for all of us, just about everything you purchase or use once was stored in a warehouse.

United States Freight Transport Report provides industry professionals and strategists, corporate analysts, freight transportation associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the United States’ freight transportation industry.

Having been ravaged by 2009’s global economic downturn, a recovering US economy has helped the US freight transport sector back on its feet in 2010, with most transport modes registering steady pick-ups in volumes in the first half of the year. The American Trucking Association (ATA)’s For-Hire Truck Tonnage Index rose by 9.4% year-on-year (y-o-y) in April 2010 on a seasonally-adjusted basis, representing the largest gain recorded by the index since January 2005 and the fifth consecutive month of y-o-y increases. April’s rise meant that US truck tonnage volumes had grown by 6% y-o-y in 2010. Meanwhile, according to figures provided by the Port Authority of New York/ New Jersey, freight volumes handled at JFK Airport totaled 115,000 tonnes in April, up by 31.6% y-o-y from the facility’s 2009 nadir, though they fell by 5.1% on a month-on-month (m-o-m) basis.

Things are also looking more positive from a company perspective, and freight transport operators have taken the rebound in economic activity as a cue to expand capacity and chase potential mergers and acquisitions.

Though the prevailing mood for the sector has so far been positive in 2010, continued uncertainty surrounding the strength and longetivity of the US economic recovery and a nervous consumer and manufacturing sector mean that operators are unlikely to rest on their laurels. With these concerns firmly in mind, for most transport modes BMI is forecasting recoveries which are moderate rather than remarkable and expects the rate of growth for most sub-sectors to relent somewhat in 2011 as the country’s economy loses some of its early momentum.

The US port sector is expected to show one of the industry’s stronger growth patterns in 2010 with the country’s two largest west and Gulf Coast terminals, the port of Los Angeles (LA) and the Port of Houston, forecast to register respective increases of 6.7% and 5.3% in their total tonnage throughput after no growth, and in LA’s case an 18.4% contraction in handling in 2009.

The US air freight sector has also enjoyed strong growth metrics and is on course for a sizeable rebound in 2010 after 2009’s 10.2% contraction in freight tonne-km flown. BMI forecasts a reverse of 8.3% with carriers projected to fly 21.6bn freight tonne-km.

Road and rail freight, meanwhile, are expected to experience a more moderate rate of growth in keeping with the relatively narrow contraction in volumes seen in 2009. BMI forecasts US rail freight volumes to increase by 4.5% y-o-y to 2.49trn freight tonne-km after a fall of 5.5% in 2009. Road freight, having contracted by 3.2% in 2009 is predicted to increase by 2.9% in 2010 to 1.99trn freight tonne-km. The US’s in-land waterways should display an ever more slender growth pattern with total volumes carried predicted to increase by 0.5% to 646.99bn freight tonne-km after contracting by 0.7% in 2009. The recovery in the US freight transport sector is largely consistent with the projected uptick in the country’s total trade volumes which in 2009 decreased by 11.9% in real terms. In 2010 we forecast the country’s total trade to grow by 7.8% with imports and exports set to increase by 7.7% and 7.9% respectively.


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2 Comments

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2 responses to “USA Freight Industry Is Back

  1. We’ve been seeing the recovery actually level off as the year has progressed, and as the monthly comparisons to last year have gotten tougher to beat. Here is our latest take on the LAX situation.
    http://www.joc.com/air-expedited/lax-freight-recovery-levels

  2. I finance commercial real estate, including warehouse-office properties. I’m good with both investor and owner-occupied properties, and with owner-occupied I can do both SBA and non-SBA (conventional) loans. Can I be of service to anyone with purchase financing or refinancing in the LAX area?

    Earl A. McCoubrey
    California DRE 01747620
    Fidelity Bancorp Funding, Inc.
    (714) 908-5149
    emccoubrey@fbcommercial.com

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