Trucking volume and revenues in the U.S. are down for the second
year in a row and the decline is significant although this article
doesn't give us the real numbers. What is going on?
I'll assume that trucking volume is actually down since trucking
stocks are down. The data on railroad shipments are definitely up. The
economy is up and final destination retail sales are up. What is
happening to trucking?
I can see three likely reasons. First, price. Because of the dramatic rise in oil prices which effects trucking much more than rail, some trucking business moved over to rail.
Second, the continued increase in merchandise from China, which
means more merchandise is entering the port of LA-Long Beach rather
than moving by truck from any other port or any U.S. factory. This
means a reduction in trucking because rails are the main carriers out
of LA-Long Beach; so much so that a new rail line is being completed
across the U.S. from LA on the Southern route.
Lastly, the Wal-Martization of American distribution as more businesses copy Wal-Mart and improve their warehousing and transshipping systems. Inventories per retail sale have been going down.
To summarize: while trucking is going down, efficiency is going up. Three more cheers for commerce.