2/20/16
Top Economists Share Their Outlook for the Years Ahead Featuring: Bob Costello, American Trucking Associa;ons Kyle Isakower, American Petroleum Ins;tute Sponsored by:
Uneven Economy = Uneven Truck Freight Volumes
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2/20/16
Quarterly Real GDP & Forecasts 6% 5%
4.6%
2014
2015
2016
2017
2.4%
2.4%
2.4%
2.8%
4.3% 3.9%
4%
3.2% 3% 2.1%
2.0%
2% 1%
2.0%
3.0%
2.3%
0.7%
0.6%
0% -‐1%
-‐0.9%
-‐2% Q1 2014
Q1 2015
Q1 2016
Sources: BEA & ATA
Real Personal Disposable Income Growth 4% 3.5% 3.1%
3.2%
3.1%
3%
2.7%
2.5% 2% 1.0%
1%
0%
-‐1% -‐1.4% -‐2% Avg 2000 -‐ 2007
2010
2011
2012
2013
2014
2015
2016
Sources: BEA & ATA
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2/20/16
Household FormaPon will Support Further Gains in Housing Starts
H.S.
2014
2015
2016
1 Mil
1.11 M
1.23 M
Sources: Census, IHS & ATA
ISM Indexes
(Manufacturing vs Service Sector)
Through January 2016
Source: InsPtute for Supply Chain Management
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2/20/16
ISM Index
(Manufacturing Sector)
Recessions
Growth Line
The ISM index has predicted all 10 recessions since 1950, plus 14 more. Source: InsPtute for Supply Chain Management
Total Business Inventory-‐to-‐Sales RaPo (Data adjusted for seasonal, holiday, and trading-‐day differences, but not price changes)
1.55 1.50 1.45 1.40 1.35 1.30 1.25 1.20 1.15 1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Source: Census Bureau
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2/20/16
Growth in Various Trucking Volume Measures (Year-‐over-‐Year Percent Change)
Source: ATA’s Trucking Ac+vity Report
For-‐Hire TL Volumes
(All data is a 3-‐month moving average; Includes all types of TL freight)
Source: ATA’s Trucking Ac+vity Report
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2/20/16
TL Loads and LTL Tonnage Growth 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% -‐1% -‐2% -‐3% -‐4% -‐5%
14.3%
2014
2015
6.8%
3.5% 2.5%
2.2%
1.9%
1.8%
1.0% 0.0% -‐1.1% -‐2.6% -‐3.7% Total TL
Dry Van
Flatbed
Reefer
Tank Truck
LTL Tonnage
Source: ATA’s Trucking Ac+vity Report
Tractor Count Changes by Carrier Type 7%
Slowing
2014
6%
Accelera;ng
5%
4.0%
4%
5.6%
2015
4.0%
3% 2% 1% 0%
0.0% -‐0.2%
-‐1%
Slowing
-‐2% -‐3% -‐4%
-‐3.9%
-‐5% Small TL
Large TL
LTL
Source: ATA’s Trucking Ac+vity Report
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2/20/16
Pricing Proxy Changes by Carrier Type 6%
2014
5%
2015
3.9%
4%
3.4% 3%
3.0%
2%
1.7% 1.2%
1%
0% -‐0.2% -‐1% Small TL Rev/Mile
Large TL Rev/Mile
LTL Rev/Ton
Source: ATA’s Trucking AcPvity Report
Drivers
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2/20/16
100% 90%
98%
Truckload
98%
LTL
95% 90%
83%
80% 70% 60%
52%
50% 40% 30% 20% 10%
9%
8%
8%
2010
2011
2012
11%
12%
10%
2013
2014
2015
0% 2015 is for the first three quarters of the year. Source: ATA’s Trucking Ac+vity Report
Shortage was 48,000 in 2015. At current trends, it would balloon to 175,000 in 2024.
Source: ATA’s Truck Driver Shortage Analysis 2015
Source: ATA’s Truck Driver Shortage Analysis 2015
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2/20/16
Source: ATA’s Truck Driver Shortage Analysis 2015
Source: ATA’s Truck Driver Shortage Analysis 2015
For more informa;on, see ATA’s recent study at: www.trucking.org
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2/20/16
Driver Shortage: Causes 1. Demographics • Age • Women 2. Lifestyle 3. More alterna;ves today with equal or more pay and home every night 4. Regula;ons 5. It’s a big responsibility and some people don’t want it 6. Overall – many, many reasons – So no one solu;on
Driver Shortage: SoluPons/Market ReacPons 1. Pay is increasing 1. Base pay 2. Many fleets are changing pay models where possible 3. Sign-‐on bonuses 4. Benefits 2. Everyone needs to treat drivers beber 1. Don’t hold up drivers at docks 2. Shippers: delivery windows are beber than appointments 3. Shippers need to work with their customers
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2/20/16
Driver Shortage: SoluPons/Market ReacPons 3. Lower interstate driving age/graduated CDL 4. More at-‐home ;me where possible 5. Fix conges;on/infrastructure – Yes, it adds to the problem as drivers are sick of sieng in traffic 6. Improved driver image: TMAF 7. Former Military – Hiring Our Heroes 8. Autonomous trucks?
Industry Structure and Long-‐Run Outlook
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2/20/16
Trucking’s Importance to the Economy Has Surged Over the Decades Billions of Tons
Fact: Trucks will haul more than 10.3 billion tons of freight in 2015, represen;ng 69.2% of all freight tonnage.
Truck
Rail
Sources: U.S. Freight Transporta+on Forecast to 2026, Eno Founda+on, ATA
DistribuPon of Tonnage by Mode: 2015
Truck Tonnage Only Source: U.S. Freight Transporta+on Forecast to 2026
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2/20/16
The Industry is Dominated by Small Fleets Large Business 2%
Fact: In 2014, the top 20 for-‐hire TL carriers accounted for just 11% of total TL industry revenue.
Small Business 98%
Sources: U.S. Freight TransportaPon Forecast to 2026; American Trucking Trends
All Modes of Freight TransportaPon Will Grow Total Increase in Tonnage from 2015 to 2026
Pipeline
Rail Intermodal Air Trucking Waterborne Rail Carload
Source: U.S. Freight Transporta+on Forecast to 2026
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2/20/16
Growth in Truck Tonnage (2015-‐2026) Compared with Actual Tonnage in 2026 for All Other Modes
Sources: U.S. Freight TransportaPon Forecast to 2026; ATA
Growth in Truck Tonnage (2015-‐2026) Compared with Actual Tonnage in 2026 for All Other Modes
And, 2 billion more tons = 525,000 addi;onal Class 8 tractors needed.
Sources: U.S. Freight TransportaPon Forecast to 2026; ATA
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2/20/16
Thanks
Twiier: @ATAEconBob
Factors Affecting the Supply and Demand of Refined Products Kyle Isakower Vice President, Regulatory and Economic Policy American Petroleum Institute NATSO Show Lake Buena Vista, FL February 23, 2016
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2/20/16
Future U.S. Energy Demand The U.S. will require 9 percent more energy in 2040 than in 2013
Source: EIA, Annual Energy Outlook 2015
Future Global Energy Demand The world will require 56 percent more energy in 2040 than in 2010
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2/20/16
U.S. Energy Revolution U.S. crude oil production million barrels per day
2013
History
Needs HF
U.S. maximum production level of 9.6 million barrels per day in 1970
Tight oil
Other lower 48 onshore
Lower 48 offshore
Alaska Source: EIA, Annual Energy Outlook 2015 Reference Case 1220 L Street, NW • Washington, DC 20005-4070 • www.api.org
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Refined Product Price Tracks Crude
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2/20/16
Many Factors Affect the Price of Oil
Source: EIA
U.S. Production Has Replaced Global Disruptions
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2/20/16
Stronger Dollar Puts Downward Pressure on Price
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2/20/16
Global Demand Expected to Rise Gradually in the Near Term
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Production Growing Faster than Demand through 2017
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2/20/16
Anticipated Demand Growth; NonOPEC Supply Reduction
• Potential 1.8 MBD gap! 1220 L Street, NW • Washington, DC 20005-4070 • www.api.org
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Can OPEC Production Fill the Gap?
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2/20/16
Questions?
Learn more at: • www.api.org • www.vote4energy.org • www.energytomorrow.org 1220 L Street, NW • Washington, DC 20005-4070 • www.api.org
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