Freight Volumes Slowly Trending Upward

Though freight shipments as tracked by the Department of Transportation (DOT) remained lackluster at the end of 2009, according to Fleet Owner, total volumes grew slowly yet steadily over the course of the year – a trend that is expected to pick up speed as 2010 progresses.

While the DOT’s Freight Transportation Services Index (TSI) remained unchanged in 2009 from November, the index ended the year trending higher. According to the DOT’s Bureau of Transportation Statistics (BTS), though the Freight TSI declined 4.1% during 2009, the index increased 2.9% over the last seven months of the year.

The Freight TSI – which measures month-to-month changes in freight shipments in ton-miles from for-hire trucking, rail, inland waterways, pipelines and air cargo carriers – reached 96.2 in December, a 2.9% increase from its low of 93.5 reached in May – the lowest index reading since June 1997.

Those numbers are in line with industry analyst expectations of continued slow recovery in freight volumes, which should pick up speed in the second half of 2010.
“Right now, we’re still waiting for the ‘line of dominoes’ to fall in terms of the freight market,” Kenny Vieth, partner and senior analyst with ACT Research Co., told Fleet Owner. “But when freight demand turns, it will be big. Fleets are going to go from not wanting trucks to buying all the trucks they can get their hands on.”

Vieth believes the trucking industry is still a quarter or two away from material improvement in freight rates at this point – a view shared by other analysts as well.
“We continue to believe pricing has reached an inflection point for the truckload industry,” noted Jon Langenfeld, transportation and logistics analyst with Wall Street investment firm Robert W. Baird & Co., in the company’s monthly research brief.

“Though carriers remain guarded about first half 2010 bid season prospects, we believe rates have stopped deteriorating,” he said. “Ongoing capacity reductions, through below-replacement demand for new trucks and carrier failures, should return the market to equilibrium during 2010.”

The global economy overall seems to be in recovery, as well, which could help fuel stronger freight flows in the U.S. as 2010 progresses, according to Fitch Ratings. “Recent data have confirmed that global economic recovery started in mid-2009, supported by policy stimulus measures, an easing in the pace of inventory correction and a pick‐up in world trade,” the agency said in its recent Global Outlook 2010 report.

China Tightens Internet Control!

(AP) -- China's technology ministry moved to tighten controls on Internet use Tuesday, saying individuals who want to operate Web sites must first meet in person with regulators. The state-sanctioned group that registers domain names in China froze registrations for new individual Web sites in December after state media complained that not enough was being done to check whether sites provided pornographic content.

The Ministry of Industry and Information Technology said that ban was being lifted, but would-be operators would now have submit their identity cards and photos of themselves as well as meet in person with regulators and representatives of service providers before their sites could be registered. It said the rule was aimed at cracking down on pornography.

China has the world's biggest online population, with 384 million Internet users. The government operates the world's most extensive system of Web monitoring and filtering, blocking pornographic sites as well as those seen as subversive to communist rule. The new regulations come as the government is in talks with Google Inc. about whether the U.S.-based Internet giant will be allowed to continue operating in China after saying in January it would no longer cooperate with the country's Web censorship. The two sides have given no details of the status of their discussions.