The amount goods hauled by trucks will grow by more than 3 percent annually over the next five years, according to an American Trucking Associations forecast issued Wednesday.
The trade group said freight volume will grow 2.8 percent in 2017, and will then growth will accelerate to 3.4 percent annually through 2023 before slowing again, according to its Freight Transportation Forecast for 2017.
Trucking will remain the dominant freight mode – moving 10.73 billion tons of freight in 2017. But all forms of freight movement are rising.
“As the U.S. population grows and the economy increases with it, we will see continued gains in demand for freight transportation,” said Bob Costello, chief economist for ATA.
In 2017, approximately 15.18 billion tons of freight will be moved by all transportation modes – trucking, rail, air cargo, water or pipeline – which will rise 36.6 percent to 20.73 billion tons in 2028, ATA said.
Freight volumes will retreat to a more modest annual growth rate of 2.3 percent between 2023 and 2028.
Freight tonnage is projected to grow 40.4 percent over the forecast period between now and 2028. Revenue from hauling goods is expected to rise 89.1 percent by 2028.
Manufacturing, consumer spending and international trade are among the key contributors to the rapid growth.
While freight tonnage for trucking is expected to drop, its total volume transported will still increase substantially more than any other mode, the report said.
However, over the forecast period, shortfalls will develop as the industry starts to experience “selected tightness in freight handling capacity, enough to suggest that capacity expansion will be required if the modes are going to be able to handle anticipated growth,” Costello said.
“I think this [report] highlights that all modes of transportation are going to grow,” Costello said. “As an industry association that represents the largest of those – trucking – that’s going to be our challenge – to figure out how to move all of this freight.”
Trucks hauled 70.6 percent of total tonnage in 2016, but that number is expected to drop to 67.9 percent in 2023, then rebound slightly to 67.2 percent in 2028 as freight movement is buffeted by economic headwinds.
Although Costello didn’t offer a year-by-year forecast, he said in a conference call that by 2028, “I think it’s pretty safe to say we are going to have a recession. So, you have to also take that into consideration, that would also bring down those averages.”
The average growth of truckload tonnage will be around 2.7 percent per year from 2017 to 2023, then taper off to 2 percent per year from 2024 to 2028. For less-than-truckload, or LTL, carriers, the rate of growth will average 3.3 percent over the next five years and drop to 2.9 percent by 2028.
The average tonnage volume for private carriers will average 2.8 percent growth rate per year until 2023, dipping to 2.1 percent in 2028.
Trucking companies’ revenue, including both for-hire carriers and private fleets, is estimated to reach $719 billion in 2017, making up approximately 79.9 percent of the $900 billion generated by all transportation modes. That number is expected to rise to $1.25 trillion with 77.7 percent of the total transportation mode revenue by 2028.
The U.S. gross domestic product is expected to remain “relatively stable” over the forecast period with an annual average growth rate of 2.3 percent in 2017 to 2023, and dipping to 1.9 percent in 2024-2028.
The forecast predicts more trucks will be on the road in the coming years.
Sales of Class 8 vehicles are expected to climb 38 percent from 186,003 vehicles in 2017 to 257,567 in 2028. The number of Class 8 vehicles in operation is projected to rise 19 percent from 3.43 million to 4.07 million by 2028.