Outlook for Freight Activity Seen as Improved

Three measures of freight activity and spending were mixed, according to new figures, but the outlook for their performances has improved, according to Cass Information Systems.

The Cass Truckload Linehaul Index, which tracks monthly changes in linehaul rates, fell 0.9% year-over-year in December to a reading of 126.6, marking ten consecutive monthly declines.

Graphic: Cass Information Systems

Despite this negative trend, analysts at the investment firm Avondale Partners said, "the current strength being reported in spot rates is leading us to believe that our current -3% to 1% truckload pricing forecast may need to be improved or moved to a slightly more positive outlook if the strength in spot rates continues long enough to move contract rates back into positive territory."

One possible reason is that when the December reading is compared to the month before, it improved 2.6%. That marks its biggest month-over-month gain of 2016 and its highest reading since December 2015.

Meantime, the Cass Intermodal Price Index, which tracks changes in total intermodal per-mile costs including fuel, increased 1.5% year-over-year in December to a reading of 129.2. This follows year-over-year hikes of 0.3% and 0.4% in November and October, respectively, and is 2.8% higher in December than the level the month before.

Although diesel fuel prices have recovered from their early 2016 lows, "we do not expect a significant amount of sequential strength from intermodal," said Avondale Partners. “But, the current level of demand and pricing will produce a positive year-over-year comparison for the next nine to 10 months.”

The two indices are based on data from actual freight invoices paid on behalf of freight payment process Cass Information Systems clients.

Both reports came as the December results were released for the Cass Freight Index, which measures monthly levels of shipment activity, in terms of volume and expenditures.

Its measure of shipments showed an increase ...Read the rest of this story

What Dealers Are Doing to Better Meet Fleet Needs

Denise Rondini

Fleets grumble a fair amount about truck dealers. They complain about wait times and poor communication, among other things. While it may feel like dealers are ignoring fleets' concerns, based on interviews with the American Truck Dealers/Heavy Duty Trucking/Procede Truck Dealer of the Year nominees, dealers not only hear what fleets are saying, but also are trying to do something about it.

Here is a sampling of some of the ways dealers are trying to improve their service to fleets.

“We went through a lean initiative at all our locations,” says James Carello, president and dealer principal, Regional International Corp., Henrietta, New York. “We looked at how we wrote trucks up, how we communicated with customers, how we were using technology, and we streamlined our operation.”

In addition, Carello has a policy of never walking away from a customer. “If a customer buys a truck from me, and he has got a problem, I am going to do things to support him in every way.” He says this is true even if the problem is not the result of something his dealership did.

In order to bring service closer to his customers, Carello has also added five subcontractors who are trained and authorized to sell parts and perform service, including warranty work. His goal is to have customers no more than 35 miles away from one of his service facilities.

Kathryn “Katie” Hopkins, executive vice president and dealer principal, Truck Centers Inc., Troy, Illinois, says her dealerships now produce work flow reports that track repairs so the TCI team can see what's going on during the entire repair process. The headquarters location also offers service 24 hours a day/7 days a week. And to ensure parts availability, TCI provides parts and service at several of its customers' locations. This helps expedite getting ...Read the rest of this story

Regulatory Outlook: Sunny if Foggy for 2017

“I believe there will not be a ton of regulations that will go 180 degrees due to the change in administration.” – Bill Sullivan, American Trucking Associations

Politicking is one thing; governing quite another. Politicians may toss off promises willy-nilly to run up votes. But once elected, delivering on those commitments requires them to exquisitely manipulate the levers of governance — skillfully engaging in everything from harnessing public opinion and legislative horse-trading to forcing power plays and forging intricate compromises.

President-Elect Donald Trump has promised to eliminate two regulations for every one enacted. How hard will it be to keep his promises of removing overly burdensome regulations — and which trucking regulations are most likely to be affected?

It would seem easier to accomplish political promises when control of the White House, the Senate, and the House ends up in the hands of one political party, as it did spectacularly in November. When a party scores that trifecta and has a well-defined agenda to pursue under the leadership of a president elected with a popular-vote mandate, remarkable change can be effected in short order.

On the other hand, the majority leaders of any party on Capitol Hill in any year can be counted on to protect the fiefdoms afforded them by the Constitution's separation of powers principle. For them, the only election that really matters is the next one.

So the Speaker of the House and the Senate Majority Leader may not march in lockstep with a president of the same party if, like Trump, he largely does not share their political orthodoxy. That's because doing so could cost them control of one or both chambers in the 2018 mid-term elections. Even with the Trump effect bolstering their candidates last November, the Democrats still managed to pick up one seat in the Senate and several ...Read the rest of this story

Zacks: J.B. Hunt Misses on Q4 Earnings (JBHT)

NAFTA Freight Improves for Only Second Time in Nearly 2 Years

U.S.-NAFTA freight value percent change from the previous year, over the last 24 months. Graphic: U.S DOT

Newly released figures show the value of cross-border freight moved between the U.S. and its neighbors directly to the north and south increased in November for the only the second time in nearly two years, but trucking had the smallest gain.

According to the U.S. Transportation Department $91.1 billion in freight moved between here and North American Free Trade Agreement participants Canada and Mexico, a 3.3% increase from November 2015. This follow declines in September and October and a small hike in August, the first year-over-year improvement since December 2014.

The overall November gain was seen in all five major transportation modes with trucking seeing the smallest hike, just 0.6%. The value of commodities moving by pipeline increased 30.6%, vessel by 12.5%, air by 6.2% and rail by 5.1%. These five modes carried 85.1% of the total value of U.S.-NAFTA freight flows.

Trucks carried 64.5% of U.S.-NAFTA freight and continued to be the most heavily utilized mode for moving goods to and from both U.S.-NAFTA partners. Trucks accounted for $30.7 billion of the $49.8 billion of imports, or 61.6%, and $28 billion of the $41.3 billion of exports, or 67.8%. Rail remained the second largest mode by value, moving 15.3% of all U.S.-NAFTA freight.

From November 2015 to November 2016, the value of U.S.-Canada freight flows increased by 2.2% to $46.1 billion as the value of freight on three modes increased from a year earlier. The value of freight carried on pipeline increased by 30.1%, reflecting the increased value of mineral fuels, especially crude oil. Air increased by 6.3%, and rail by 0.6%.

Truck decreased by 0.1% and vessel by 3.3%. During this 12-month period, much of the mineral fuel ...Read the rest of this story

Bower Offers Manual Transmission Rebuild Kits

Bower Heavy Duty Bearings by NTN now offers manual transmission rebuild kits in its product lineup, the company announced.

Bower's manual transmission kits are bearing-only kits made of original equipment components. In addition to being available as a kit, Bower transmission bearings can be purchased individually as well, allowing for the flexibility to buy only what a customer needs and reducing excess inventory.

“We have an excellent product to offer the marketplace and we are excited to expand our rebuild kit offering to satisfy the needs of our customers,” said Ray Froude, product manager, auto & heavy duty truck, NTN, “The Bower transmission kit line is a natural extension of our product offering to the rebuilder channel to go along with our Bower differential kits.”

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December Heavy Truck Orders Hit 6-Month High

North American Class 8 retail sales ended the year on a good note, rising to a six-month high of 21,281 units, according to final numbers from ACT Research.

With December in the books, Class 8 truck orders for all of 2016 totaled 249,952 units while Class 8 production hit 228,347 units. ACT noted a seasonal weakness in production, with a reduced December build amounting to only 14,145 units for the month.

Strong December sales and modest production reduced the industry's inventory overhang by 6,300 units, bringing the full-year inventory correction to nearly 21,000 units. Last year ended with a 36-month low 44,865 inventory units.

“Going forward, the big inventory pulldown into the end of the year, and the full-year inventory correction, will allow industry production to more closely align itself with demand,” said Kenny Vieth, ACT Research president and senior analyst.

Thanks to school buses and recreational vehicles, the Class 5-7 truck market had a banner year for the second consecutive time, with December medium-duty orders rising above 20,000 units for only the second time since April. Net orders for the month totaled a nine-month high of 22,083 units. While the consistency in medium-duty vehicle orders the past two years is almost unheard of, ACT Research expects to see the trend continue for 2017.

“Full-year 2016 saw orders fall 0.7% from 2015 to 229,403 units. School bus and RV orders were up incrementally in 2016, while trucks and step vans saw volumes fall incrementally,” said Vieth. “Given that consumer-related MD economic drivers remain largely unchanged, our expectations are for more of the same in terms of MD demand in 2017.”

Related: Medium-Duty Orders Fall 1.1% in 2016

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