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WASHINGTON, DC-Data from a variety of sources show the US freight transportation industry improving over the first part of the year. Most figures are for June or Q2, the most recent period for which statistics are available.

On Aug. 13, the US Department of Transportation’s Bureau of Transportation Statistics reported the Freight Transportation Services Index rose in June for the second consecutive month, increasing a tenth of a point from its May level to 111.5. According to the bureau, the index advanced 2.9 points since January, its largest first-half increase since 2002. Last year the index dropped 0.4 points in the first half before rising about the same amount in the second half to finish the year virtually unchanged.

Meanwhile, the Arlington, VA-based American Trucking Associations’ (ATA) advanced seasonally adjusted For-Hire Truck Tonnage Index increased 1.3% in June, its second consecutive month-to-month gain after rising 0.5% in May. Using a base of 100 for the year 2000, the index reached 116.5 in June, the highest reading since February’s figure of 117.2. In addition, the index was 5.4% higher than the June ’07 reading, marking its eighth consecutive year-over-year increase and the largest year-over-year gain since January ’05..

Despite the uptick, ATA chief economist Bob Costello says he still can’t guarantee the US economy won’t slip into a recession later this year, but he believes it may be less likely than it appeared. “It seems that truck tonnage is once again leading the US economy,” he says. “During the 2000-2001 cycle, trucking pulled out of a recession before the aggregate economy fell into one. Unfortunately, truck tonnage could slow later this year as the overall economy is expected to be quite weak in the fourth quarter and the first quarter of next year.”

According to Costello, industry capacity has tightened in recent months as high fuel prices drive some carriers out of the market while others reduce fleet sizes. He says some carriers have removed their trucks from the US market by selling them to buyers in Eastern Europe and Central and South America. According to the ATA, trucking serves as a barometer of the US economy, representing nearly 70% of tonnage carried by all modes of domestic freight transportation.

Partly as a result of the improved statistics but more due to fleet downsizing, transportation analyst Lee Klaskow of Longbow Research in Independence, OH upgraded the trucking sector from “underweight” to “neutral.” He based his rating on a July survey showing that 44% of North American truckload carriers expect a positive business outlook for the rest of the year, compared to only 15% with similar expectations in June.

Klaskow, who does not see the economy reaccelerating till ’09 at best, says carriers will continue to disappear, creating a better pricing environment for truckers at the expense of their customers. He believes shippers will increasingly aligning themselves with large trucking companies to ensure capacity.

In addition to the above, the most recent report from the Intermodal Association of North America (IANA) of Calverton, MD reveals that total domestic volume for Q2 showed highest quarterly growth rate since Q2 ’04. The 1% boost in intermodal trailer volume was the first rise in over three years.

However, in contrast to the trucking organizations, the IANA predicts further weakness in both the intermodal and trucking industries, as concerns about bank failures, inflation and job losses continue to hobble the US economy and drive down retail sales.

According to the report, truckers face even greater challenges than intermodal carriers due to the “outsized impact of fuel on trucking costs.” Additionally, the IANA points out that truckers face other increases in cost, such as the new surcharge of $15 per 20-foot-equivalent container to be levied on truck transport at the ports of Los Angeles and Long Beach beginning in October.

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