Economy
Related: About this forumAnd Now Trucking Is Suddenly Slowing Down
And Now Trucking Is Suddenly Slowing Down
by Wolf Richter October 28, 2015
This comes at the totally wrong time. Trucking had been booming. 2014 had been a banner year. Capacity was squeezed, and rates were rising, so trucking companies went on a buying binge, ordering everything in the book in preparation for red-hot demand in 2015 and more banner years down the road. But then came 2015.
Among businesses, over-ordering and tepid sales caused inventories to rise and the inventory-to-sales ratio to spike to Financial Crisis proportions. And now businesses are trying to bring them down by trimming orders because theyre having trouble selling more to the middle class, the over-indebted modern proletariat whose stagnant incomes are being eaten up by skyrocketing costs of housing, healthcare, college, and the like and they simply cant spend that much on shippable items.
And now this is ricocheting through the industry.
Monday after hours, the largest US truckload carrier, Swift, announced earnings. And on Tuesday, it clarified the debacle. Its suffering from indigestion. The high costs from its red-hot capacity increase average truck count jumped by 831 trucks in the third quarter from a year earlier are now slamming into swooning freight demand.
Operating revenue declined 1%, which Swift blamed on the disappearing fuel surcharge, though it didnt explain why it is getting away with still charging $109 million in fuel surcharges when diesel prices have plunged to rock-bottom. ............(more)
http://wolfstreet.com/2015/10/28/why-the-heck-is-trucking-slowing-down-swift-cummins-load-to-truck-ratio/
underpants
(182,603 posts)and that operation is able to weed out lower revenue generators and actually raise prices in some areas.
Very informative link. Thanks.
elleng
(130,732 posts)I kind of wonder about the dramatic 'rationale' provided in the article. How close is your contact to the numbers?
underpants
(182,603 posts)We mostly talk in a macro sense about the industry.
elleng
(130,732 posts)I should look at the 'numbers.' Friends/colleagues used to follow this closely (we regulated freight railroads,) my friends were real train wonks, and studied all the details.
This is NOT up to the minute: https://www.aar.org/data-center/rail-traffic-data
Closer to UP to the Minute: http://railfax.transmatch.com/
safeinOhio
(32,641 posts)elleng
(130,732 posts)'having trouble selling more to the middle class, the over-indebted modern proletariat whose stagnant incomes are being eaten up by skyrocketing costs of housing, healthcare, college, and the like'
While I tend to agree with the rationale (above,) it may be a hyperbolic 'explanation' by a writer who likes drama.