Forecast of Local Freight Trucking

According to IBISWorld, local freight has not fared well in the last 5 years to 2012, as a result of slow manufacturing production and retail spending reduced the demand for shipping.

Declining demand caused an increase in competition, which limited profit margins in 2008 and 2009, as did the rising cost of diesel fuel.  Many companies were sustained by fuel surcharges.

In 2008 and 2009, revenue declined 20.5%.  Many companies recorded record losses and were forced out of business.

In 2009, the cost of diesel fuel declined, drying up fuel surcharge revenue.

Since then, revenue and diesel prices have increased but demand remains relatively weak.

In 2012, IBISWorld expects that recovering demands and increased shipping volumes will cause industry revenue to grow by 2%.

“Conditions are projected to improve slightly through 2017. As the economy recovers, the industry is expected to grow along with disposable income and, therefore, demand from manufacturing and retail spending. Additionally, diesel prices will cause growth in the five years to 2017 as companies heighten fuel surcharges to offset costs, though profit will eventually diminish. In the five years to 2017, IBISWorld projects that industry revenue will increase,” IBISWorld stated.

Although local freight trucking has had a tough five years, the forecast appears more stable.