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American Trucking Associations’ Bob Costello on the slowdown in trucking volume and shows for the economy’s outlook.
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-- another sign that the economy is on the rocks the American trucking association says that there is a major slowdown in shipping since this time last year but every and Bob Costello chief economist.
American trucking association Bob thank you so much for coming on the -- My pleasure.
So the I'm sure you heard the report before you we were talking about how earnings growth is really slowing down here in the US and companies.
Are beginning to struggle when they had been the thing that -- sort of holding everything together are you seeing evidence that through your business in the trucking industry.
Oh sure we're seeing that you know if you look at where freight was in terms of the amount of tonnage -- -- At the end of last year.
Through June of this year were off four point 4% now we're still growing on a year over year basis.
But that rate has really come down to just over 3% from almost 6% growth plaster so we have definitely seen a slowdown so far this year and freight volume.
What are business is telling you why they shipping as much -- -- not seeing demand are they what's what's gone on.
I'll tell you they're nervous they're very nervous and over and over when I talk to these companies.
Especially the bigger ones they have some money to spend they have some money to spend on new capital to hire new people.
But they don't want to they are so nervous about this fiscal cliff.
And what's gonna happen as -- -- up.
But this fiscal cliff is kind of scared and they're just holding on to -- don't want beyond that limb if the whole thing implode not a sweetheart imagine people saying actually you're asking about their shipments to use the phrase fiscal -- -- what they actually -- if they really.
They really do we know so I'm talking to trucking companies who are talking to there.
Customers right manufacturers.
Wholesalers retailers.
And everybody's nervous and so what they they don't wanna do -- they don't wanna take any risks right so and the other thing that we saw is brought up in your last segment.
Is the economy was very anemic in the second quarter and what that led to was this rise unintentional rise.
In the inventories okay -- inventories are still low compared to where they work during the recession.
But that was unintentional and that's also got him holding off not ordering his much in -- war and trucks aren't home quite I must.
That news sent a lot of people are saying that that this slowdown even -- was growth it was so much lower than the previous quarters going from better than 4% growth to to -- to down to one and a half.
That -- -- people were surprised by that they're even more nervous than they were before what you measure besides tonnage what other indicators -- there for you who.
Yeah we also look at the number of loads because when you look at -- you know certain sectors like housing can count for a lot and so forth and that's exactly what we've seen.
You know that the small it's been small but the little bit of a turnaround in housing starts as well -- booming US energy.
Has really kind of boosted tonnage compared to the number of loads number of -- so far this year -- only up about 2%.
And if you look at -- just normal driving and box trailer not refrigerated not flat bed like for housing or steel and -- the tank trucks.
That breeds actually starting to contract yes -- -- China -- -- forward from here what do you see the next quarter beyond.
Well you know are still hopeful that we can just edge out a little bit of growth but Alitalia.
I'm really curious to see what July house forest.
You know the other thing that's kind of been weird this year.
Is we had such a warm weather I wonder that hold some business forward in the year and now it's weaker but that certainly.
Business is.
Households they're nervous and when you're nervous you don't take risks and their for you don't buy as much and we we -- but hall 70% of the tonnage out there so we're good reflection -- -- macro economy has still some great insight and very responsive to the whole question answer thing thank you so much for coming in and it.
