New projections from the American Trucking Associations (ATA) reveal a significant increase in truck tonnage, with estimates showing a growth to 14.2 billion tons by 2034.
According to ATA Chief Economist Bob Costello, this forecast solidifies trucking’s position as the dominant force in the U.S. freight industry. In 2022, trucks moved an impressive 72.2% of all freight tonnage and contributed to a remarkable 79.2% of revenue.
Trucking industry expects significant growth, accounting for majority of freight tonnage.
According to forecasts, overall truck tonnage is predicted to increase from 11.3 billion tons to 14.2 billion tons by 2034. This represents 72.4% of freight tonnage in 2023 and 72.6% at the end of the forecast period.
The revenues of the trucking industry are expected to soar from $1.01 trillion in 2023 to $1.51 trillion in 2034, making up a substantial 78.8% of the freight market.
Meanwhile, the rail industry is also predicted to experience growth. Rail intermodal revenues are expected to rise from $21.7 billion in 2023 to $35.2 billion in 2034. However, as coal and bulk petroleum shipments decline, rail carload tonnage will decrease from 11% to 10.1% of total freight by 2034.
In addition, air cargo tonnage is projected to increase from 17.6 million tons this year to 23.7 million tons in 2034. Pipelines will also see a slight growth in their share of freight tonnage, rising from 9.8% in 2023 to 10.4% in 2034.
“Knowing where our industry and economy are headed is critical for decision makers,” said ATA President and CEO Chris Spear. “This Freight Forecast should be top of mind for policymakers in Washington, Sacramento and wherever decisions are being made that affect trucking.”
Trucking Industry Forecasts Show Signs of Recovery Amid Ongoing Challenges
After enduring a period of decline, the trucking industry is slowly starting to see improvements. Truck operating costs, however, still outweigh spot rates, with contract rates continuing to decrease year-over-year. Despite this, there is a margin of positivity.
Good news can be found in consumer spending data, as real spending on goods is on the rise after a two-year period of stagnation. The third quarter of 2023 saw a 0.5% increase in spending compared to the previous quarter, and a 2.3% increase from the same period last year. Specifically, durable goods, especially in the automotive sector, were the driving force behind this growth. Consumers are now opting to save less and spend more, with the personal saving rate dropping by 50% since before the pandemic.
Another positive development is the steady increase in truckload demand, which has finally turned positive year-over-year after nine months of decline. According to Uber Freight’s report, truckload demand hit its lowest point in April 2023 and has been steadily increasing since then. In the third quarter, it rose by 1.2% compared to the previous quarter and remained stagnant year-over-year. On the supply side, there was a 0.5% decrease in Q3, but it still remained 1.4% higher than the previous year. It’s worth noting that the manufacturing economy continued to contract for the 12th consecutive month, according to the ISM Purchasing Managers Index.
Employment in the trucking industry has faced challenges as well, with a decline of 24,000 jobs (-1.5%) in the third quarter of 2023, largely due to the Yellow bankruptcy. In October, another 5,000 jobs were lost, resulting in a 1.7% decrease compared to the previous year. Long distance truckload employment, which serves as a key indicator of spot rates, has also been on a downward trend but remains only 1.1% below its peak.
In the less-than-truckload (LTL) sector, tonnage continued to decline in the third quarter, although there were signs of improvement among individual carriers, thanks to the closure of Yellow. Overall, LTL tonnage and shipment count is expected to remain at lower levels for the rest of this year and into the next, and the average shipment size is also decreasing.
Source: CCJ Digital
