Recently released data from the American Trucking Associations (ATA) revealed truck tonnage jumped in August. The ATA's seasonally adjusted For-Hire Truck Tonnage Index revealed tonnage increased 1.4 percent in August, a significant jump when compared to the 0.6 percent drop seen in July.
Tonnage jumps, rate increase could follow
The jump was the most significant gain seen since May, according to the ATA, and represented a year-over-year increase of 6.9 percent. The not seasonally adjusted index also experienced a jump, increasing 1.5 percent from the previous month.
"The strength in tonnage continued again in August, with the index increasing in three of the last four months," ATA Chief Economist Bob Costello said. "The improvement corresponds with a solid gain in manufacturing output during August reported by the Federal Reserve last week."
As tonnage increases and drivers are responsible for making more stops, they will rely more heavily on logistic software to ensure deliveries and pickups are made on schedule. But because fleets will be busier and potentially have less room for cargo, this could lead to a jump in rates.
A survey from Transport Capital Partners has revealed carriers are more optimistic when it comes to volume and rate growth. The poll found 61 percent of carriers anticipate their volume will jump over the next year, compared with 50 percent who said the same in mid-2012. Rate growth is also expected, with 66 percent of carriers overall anticipating them throughout the next year. Larger carriers are slightly more optimistic, with 74 percent expecting a rate hike, as opposed to 48 percent of smaller fleets.
"Spot market trends over the summer have been positive for most carriers and this may be the precursor to continuing volume optimism," stated Richard Mikes, partner at Transport Capital Partners.
Coping with increased demand
To address the growth in the transportation industry, more carriers need to improve efficiency and ensure they have the resources to complete runs on schedule. Failure to do so could result in lost contracts, dissatisfied customers and a poor reputation. By employing route optimization software, carriers can cope with the increase in tonnage appropriately and determine the most time-efficient way to schedule pickups and deliveries. This ensures a company can follow through on customer obligations and take full advantage of the growing demand for freight space.