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Rising Volumes Could Lead to Capacity Crunches: ATA

American Trucking Associations (ATA) is projecting U.S. freight volumes to grow 2.8% this year, followed by 3.4% annual growth through 2023 – a trend that could lead to potential capacity shortages.

The findings, released today through ATA Freight Transportation Forecast 2017, also project a modest 2.3% annual growth rate beyond 2023. About 15.18 billion tons of freight are expected to be moved by all transportation modes this year, rising to 20.73 billion tons in 2028. Related revenue is expected to jump 89.1% during the same time period.

In 2016, trucks accounted for 70.6% of freight tonnage and US $676 billion in related revenue, or 79.8% of the available money. Trucks will account for 70.7% of freight volumes overall in 2017, according to the report, but dip to 67.1% by 2028. Truckload carriers are expected to handle 34.8% this year, with 1% handed to LTL carriers, and 35% moved by private carriers. Other transportation modes will account for the rest.

IHS Global Insight says that total truck tonnage, handled by for-hire and private carriers, hit 10.42 billion tons in 2016, reaching the highest level since 2007. That’s up 22.3% from the low levels recorded in 2009.

“Over the forecast period, capacity shortfalls will develop,” the report says. “We are starting to see some selected tightness in freight handling capacity: enough to suggest that capacity expansion will be required if the modes are going to be able to handle anticipated growth.”

Bulk tonnage is forecast to increase by 2.8% on its own this year, thanks to factors including a turnaround in energy, more chemical shipments, and general economic growth, the report adds. That average is expected to hold until 2023, and rise to 3.6% annually until 2028. General freight, meanwhile, should rise 2.9% this year because of growing manufacturing and domestic demand. Much of that will come in the form of building supplies, metals, machinery, and light vehicles.

“After an unexpected decline in 2016, rail intermodal traffic will expand modestly in 2017. Its growth will face headwinds from the strong US dollar and its impact on US exports and foreign trade. However, we still see increased use of intermodal by major for-hire trucking companies. Intermodal growth through 2028 will continue to outpace all modes except pipeline,” the report says. “Gains in waterborne commerce will be limited over the forecast period, as over 90% of tonnage comes from slower growing bulk commodities. We expect to see a 2.6% increase in 2017 — supported by bulk, but also growth in general cargo.”

“As the U.S. population grows and the economy increases with it, we will see continued gains in demand for freight transportation,” said ATA chief economist Bob Costello. “While overall truck volumes will continue to rise, and trucking will remain the dominant freight mode, its share of freight tonnage will dip to 67.2% by 2028, with pipelines picking up most of the additional market share, and, to a lesser extent, rail intermodal.”

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