Freight Outlook Infographics Explain Strong Growth Thru 2025 & Why Now’s the time for Shippers to Evaluate Expert Help

Overall U.S. freight outlook tonnage will rise nearly 25% and revenues from that freight will surge above 70% over the next decade, per the latest long-term freight forecast released by the American Trucking Assns. (ATA).

Overall U.S. freight outlook tonnage will rise nearly 25% and revenues from that freight will surge above 70% over the next decade, per the latest long-term freight forecast released by the American Trucking Assns. (ATA).

The ATA U.S. Freight Transportation Forecast to 2025 predicts further growth not just for trucking industry, but for the entire freight economy, according to ATA chief economist Bob Costello.

freight outlook tonnage 300x300 Freight Outlook Infographics Explain Strong Growth Thru 2025 & Why Nows the time for Shippers to Evaluate Expert Help“We continue to see growth in our freight outlook– but we also see that trucking will maintain its position as the nation’s dominant mode of freight transportation,” Costello commented.

Forecastwas produced by ATA in collaboration with IHS Global Insight.

Findings of the long-range freight outlook include:

Overall freight tonnage will grow 23.5% from 2013 to 2025 and freight revenues increase by 72%

Growth in overall freight volume is pegged at 2.8% per year from 2014 to 2019, then it tapers off to 1.0% during the next six years, through 2025

Trucking’s share of freight tonnage will increase from 69.1% in 2013 to 71.4% in 2025

Rail intermodal tonnage will grow 5.5% annually through 2019 and 5.1% a year through 2025— yet rail market share will shrink from 14.5% of all tonnage in 2013 to 13.8% in 2025

Forecast also breaks down in their freight outlook how movements shape up regionally, by both percentage of inbound and outbound tonnage.

freight outlook american trucking association 300x300 Freight Outlook Infographics Explain Strong Growth Thru 2025 & Why Nows the time for Shippers to Evaluate Expert Help“Truck freight generated nearly $682 billion in revenue last year, which is a new record,” stated Costello in introductory remarks to Forecast.

“According to IHS Global Insight,” he continued, “total truck tonnage, including for-hire and private carrier operations, hit 9.68 billion tons in 2013, the highest level since 2008. As of last year, total tonnage was up 13.6% from the low in 2009.”

Costello remarked that “despite the slow [economic] recovery so far, the long-run freight outlook still remains bright for nearly all modes.”

He added that key contributors to the projected “robust growth” will involve “many factors,” including trends in manufacturing, consumer spending and international trade.

Trucking trends & continued freight outlook the report highlights:

Trucking will increase its share of the freight pool because trucks dominate the transportation of general commodities— and those will continue to grow at a faster rate than bulk commodities. Trucking will also gain from rising U.S. crude oil and natural gasproduction

As demand/production of key truck-oriented commodities improves, trucking’s market share of tonnage should expand to 70.9% in 2019 and to 71.4% by 2025

Trucking’s share of total revenue is estimated to reach 81.5% in 2025, vs 81.2% in 2013

Truckload volume will expand 3.5% per year from 2014 to 2019 and then by 1.2% per year from 2020 to 2025. This projection reflects the anticipated performance of key commodities and freight-market segments

Truckload carriers are seen as increasing their use of railroads to handle intermediate and long-distance trailer hauls through the forecast period

Less-than-truckload (LTL) volume is forecast to rise from 145.0-million tons in 2013 to 177.7-million tons in 2019 and then to 204.6-million tons in 2025— which would translate into an average annual growth of 3.8% from 2014 to 2019 and of 2.5% during 2020 to 2025

Private-carrier volume is expected to expand by 3.0% per year in 2014 to 2019 and then by 1.0% per year in 2020 to 2025

The private-carrier share of total transportation volume is forecast to “hold steady at 34.9% throughout the forecast period– compared with 34.4% in 2013

The 75-pg freight outlook report sums up the basis for its rosy forecast by pointing to numerous positive factors that are expected to play out over the next eleven years.

For starters, Forecast expects U.S GDP to improve in the years ahead, with growth of 2.9% realized in 2014 to 2019 and of 2.4% in 2020 to 2025.

“The domestic economy remains the driving force behind the performance of the nation’s freight pool, with foreign trade playing a secondary, but significant and growing role,” the report’s authors assert.

What’s more, they contend that “if we are right about the future path of the U.S. and global economy, the nation’s freight pool could grow by 23.5% over the 12 years from 2014 through 2025.”

More specifically, per the report, a “cyclical snapback” in housing and construction from 2014 to 2016 will help support freight tonnage growth of 16.6% from 2014 to 2019. In addition, it noted that general commodities will continue to expand at a “faster pace” than bulk commodities.

As for the negative side of things, the authors of Forecast point out that, “Healthy long-term growth in the United States cannot be maintained without healthy spending on the transportation infrastructure, state-of-the art equipment, and technology.”

They conclude by stating that their freight outlook forecast “remains vulnerable to ‘shocks to the system,’ such as a territorial dispute with China involving its neighbors or the United States; a worsening of the already dicey situation in the Middle East; an oil supply crisis that would send crude-oil prices spiraling higher, or [the occurrence of] major natural disasters.”

Forecast may be purchased as a bound voluume or as a downloadable PDF.

As Manufacturing is Seeing Continued Growth, Alongside the Freight Outlook, Shippers Should Turn to Experts for Focused Help

freight outlook 3PL 300x260 Freight Outlook Infographics Explain Strong Growth Thru 2025 & Why Nows the time for Shippers to Evaluate Expert HelpIf the future freight outlook seems strong, then so will the need for shippers to look to the future by employing outside expert help from third party logistics providers. Now is not the time for shippers to waste valuable non-core resources. Shippers however, will need to understand their own operations and reasons for outsourcing. This will better enable them to evaluate what the third-parties are telling them. In that regard, the following bullet points out why you may want to outsource to a 3PL in order to maintain as you grow without adding additional resources to scale:

  • to acquire an expertise, talent and resources that don’t exist internally 
  • to let the company focus on its core competency which it has determined is not logistics 
  • to develop value-added capabilities
  • to better service its customers 
  • to improve operations or customer service or simply to improve its processes.

But, Let’s Get to the Hard Point of Why It’s Important to Outsource to a 3PL While the Freight Outlook Points to a Growth Mode

All these are good and positive reasons. However, there are even more to the point reasons of compliance and simple economics:

  • to cut costs
  • to avoid capital expenditures
  • to avoid labor problems
  • to avoid costs of regulations

Given the differences in logistics service providers and the differences in why shippers outsource, we strongly suggest that the shipper look hard at both the provider alternatives and its reasons for outsourcing. It must ask some difficult questions:

What am I looking to outsource – all of my logistics operation or just a portion of it, i.e., e-commerce?

Why am I looking to outsource?

How do I describe my logistics and company operation?

What are the costs of the operation to be outsourced? Fixed costs? Variable costs?

What are its capabilities? What are its strengths, limitations?

What do my customers require of each of their own supply chain specifications?

  • How well do I service my customers?
  • If there are service problems, what are they and what causes them?
  • What do we expect from the third party? How will we know if it is meeting our expectations?
  • What about the management responsibility of the third party? How will it be done and by whom?
  • How do I effectively transition from my own operations to an outsourced one? How long will it take to transition? Are there problems during transition? If so, what are they and why?
  • What if it doesn’t work? What are the down sides to this? How serious are they to my business and my customers?

Now that You Know YOUR Needs, What do you Look for in the Right 3PL? 

Once you’ve determined your own needs, you can then begin to look for a 3PL provider that has the specific capabilities and services it needs. These questions will help shippers evaluate potential service providers:

  • What do you bring to the table? What are your experiences with my industry, with my customers?
  • What problems have you encountered with setting up third-party operations and why?
  • What will it cost?
  • How will it operate?
  • How long will it take to set up and have running properly?
  • How will we interface?
  • What do you require of my business? Is this requirement for start-up or is it ongoing?
  • Why do you want my business?
  • Why should I select you?

A company looking to outsource its logistics operations, or a portion thereof, must thoroughly understand what they are doing and what they want to accomplish. There are no shortcuts to doing it right, but there are real problems in doing it wrong. Don’t have anxiety however, set up a free logistics consultation with one of our Account Executives today.


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