Freight Shipping Companies Optimistic About Growth in 2015Posted On 1st June 2015
According to a recent survey by Wolfe Research, U.S. shipping companies are the most optimistic they have been since 2011 about the prospect for growth in the freight shipping sector, but they are also cautiously preparing for a sharp increase in transportation costs, excluding fuel costs.
The resolution of the labor dispute in California is another reason for optimism. 38 percent of shippers expect more shipping activity in the second quarter of 2015, compared to 30 percent of respondents who expected more shipping activity during the first quarter of 2015.
The approximately 600 shipping companies surveyed by Wolfe Research are expecting same-store shipments to rise on average 3.5% during the next 12 months. Last quarter, gains of only 2.8% were expected and last year expansion of 3.2% was projected.
Lower fuel prices are also a source of optimism. The U.S. Energy Information Administration (EIA) expects U.S. regular gasoline retail prices, which averaged $3.36/gal in 2014, to average $2.43/gal in 2015 and $2.63/gal in 2016. This may shift some business to LTL carriers that had previously been absorbed by rail shipping, creating opportunities in a lower fuel price environment that will benefit the freight trucking industry.
Trucks carry the largest share of goods by weight for distances less than 750 miles and more than 2,000 miles. Railroads are the dominant mode of transportation for goods moved over distances greater than 750 miles and less than 2,000 miles, accounting for 37% of total tons moved.
The survey suggests the largest volume increases will come from rail carload transport and truckload, with traffic in both areas predicted to rise by 3 percent. According to the survey, shippers are currently forecasting cargo hauled by domestic ground services, container lines, and intermodal trains to rise by 2 to 3 percent.
Survey participants, when asked for their forecast for domestic transport, said they think the truckload sectors will have the second-sharpest increase in rates, at 3.5%, followed by less-than-truckload at 3.1% percent; intermodal at 3%; ground parcel at 2.4%; and domestic air at 2.2%.
The shift in sentiment is a harbinger of accelerating growth for the entire freight shipping industry. Here at FreightRun.com, We have seen an increase in interest by customers in finding carriers providing regional next- and 2nd-day LTL service and nationwide long-haul services at competitive rates.