The American Trucking Association released it’s latest annual transportation forecast, summarizing 2004 data and projecting out through 2016. Global Insight, a well-respected research group, produced the report for the ATA.

While to most of us the world is changing rapidly, what’s striking at one level from reading the report is how little in macro terms the nation’s freight profile is changing. Through 2016, for example, trucking is projected to increase its share of the total freight market modestly, from 68.2% in 2004 to 69.1% in 2016, while total trucking company revenues almost double during the same time.

The report notes the well-known challenges for shippers in 2004: “The nation's railroads had problems as traffic exceeded expectations and service suffered from a shortage of capacity and crews. Trucking companies had to deal with capacity shortages and new hours-of-service regulations, but their biggest challenge was finding and retaining qualified drivers. Traffic flows, meanwhile, were hampered by serious port congestion.”

Among the key finding and predictions of the report:

• Trucking continues to slowly increase it’s share of the nation’s freight pool, attributed to flexibility and cycle time pressures. However, the rate of share growth will slow.
• Truckload volume in the next five years are expected to grow at 2.9% annual, while LTL volumes will grow faster at 3.3%
• Intermodal is expected to grow at a 5.9% annual clip through 2010. The report noted: “We believe rail intermodal has a bright future, but significant investment in equipment and infrastructure is needed to take intermodal service to the next level.” Factors driving intermodal growth include continued increase in offshore manufacturing and pressure on trucking from driver shortages.
• Air cargo movement will also experience rapid growth, averaging 5.5% annual increases in volume through 2010, though it remains a small part of the overall market.
• Dual trends in terms of private fleets. The report notes that in 2004, use of private fleets by shippers increased, as one mechanism to cope with the capacity crunch and service issues. However, the report predicts that the use of private fleets, especially among mid- sized companies, will shrink in coming years, as the overall trend towards outsourcing in corporations continues, and companies tire of dealing with the same issues that for-hire carriers must contend with – driver retention, fuel costs, hours of service, etc.
• In 2004, rail carriers enjoyed their biggest volume increase (5%) since 1995. However, “While the news n traffic was good, it probably could have been better. The railroads were caught somewhat flat footed by the surge in traffic volumes and found themselves at different times during the year short of conductors, engineers, locomotives, and freight cars.” The report notes the hugely capital-intensive nature of rail expansion and the resulting very deliberate decision processes means capacity expansion will likely continue to behind potential demand.

The projects for growth by mode is shown in the graphic below. Do you expect intermodal and air to grow most rapidly? Let us know your thoughts.