Freight demand dive may have hit bottom in first quater
DOT data shows 1Q freight demand plunge but buying plans tick up
By Dave Hannon -- Purchasing, 5/14/2009 7:18:00 PM
The most recent data from the Department of Transportation’s Bureau of Transportation Statistics shows freight demand in the U.S. hit a near seven-year low in March. But more recent buyer surveys from Purchasingdata.com show the first quarter may have been the low point for freight demand and, while still not growing, the demand dive may have bottomed.
The Department of Transportation’s Bureau of Transportation Statistics said this week its Freight Transportation Services Index plunged in March to its lowest level since May 2002. The Freight TSI measures the month-to-month changes in the output of services provided by freight providers across modes including trucking, rail, inland waterways, pipelines and air freight. The March reading of 101.4 is 3.3% lower than the month before, the largest monthly drop since March 2000 and a 6.4% drop from a year ago. So far this year, the index has declined 3.6%.
Other indicators that add to the notion that freight is still not moving include:
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American Trucking Associations Truck Tonnage Index dropped 4.5% in March
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North American rail carloads are down nearly 20% this year through May
But there is at least one indication that demand has bottomed and freight buyers plan to increase or are increasing their freight sourcing activity. The Purchasingdata.com monthly survey of purchasing professionals shows that buying plans for transportation clearly bottomed out in the December to February period. Since then, freight buying plans, while still well below the growth level, have improved in the second quarter, indicating buyers are not cutting back as much on freight spending as they had earlier.
WHAT DO YOU THINK?
Has demand for freight seen its low point yet? Are there other signs demand may pick up in the near-term? Post a comment here.
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