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JOC | Immediate US Trucking Capacity Crunch Unlikely

01.10.17 | Reynolds Hutchins, JOC

That crunch relies on a slate of circumstances that run the gamut from the implementation of federal trucking regulations and a shortage of available truck drivers, to a full-scale economic recovery and a nationwide right-sizing of historically high inventories. The likelihood that these factors, individually, could occur suddenly is slim. The likelihood that these factors could occur simultaneously is slimmer still.

Capacity will more than likely tighten in 2017, to the intermodal industry’s benefit after a year of volume loss across a wide range of segments. But that tightening will more than likely be gradual, giving trucking operators time to adjust and shippers time to plan ahead for higher rates.

The shippers, transportation providers, and industry analysts that have been waiting at the station all this time shouldn’t be shamed. After all, reliable sources have been trumpeting the arrival of a capacity crunch for years. Those same sources, however, have been rolling back their forecasts month to month, quarter to quarter, and year to year.

Larry Gross, a senior transportation analyst at FTR, has likened himself and other analysts to Chicken Little - pundits often asked to play prophet.

“Some shippers have gotten tired of hearing from folks like ourselves who keep saying things are going to be tighter,” Gross told JOC.com. “This forecasting business is difficult.”

FTR predicts capacity will tighten by the middle of 2017. But the word “crunch” is no longer being bandied about.

The state of US freight growth in 2017 and beyond hinges on inventories that have been piling up for years. Although some in the industry say a long-rumored destocking is in the works, at least in some industries, larger inventories may be the new norm until shippers in general improve their ability to forecast sales and track goods as they move through the supply chain.

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Follow Larry Gross on Twitter: @intermodalist

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