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Another solid month, Sylectus numbers reveal

Sylectus has released its monthly report on the economics of the trucking industry, and the numbers show another solid month.

Even though July 2011 had one fewer business day than July 2010, total revenue increased by 8 percent year over year and total revenue per mile showed a 5 percent increase. Total miles and linehaul revenue per mile each increased 3 percent in July 2011 compared with July 2010.

Although the July 2011 numbers were down sharply from June 2011 — total revenue decreased 20 percent and total miles 17 percent — that wasn’t totally unexpected.

As Sylectus President Stuart Sutton pointed out in his report, June is typically one of the strongest business months in trucking while July is typically the weakest. Also, July had two fewer business days than June, offering 10 percent less opportunity to do business.

“Considering June 2011 was such a good month, July 2011 was a relatively strong month and many Sylectus customers made money,” Sutton wrote.

Rates have remained high and demand continues to be strong, all while driver and truck capacity struggle to regain their pre-recession numbers.

Although there is some concern about volatility in the stock market following Congress’ approval of an increase in the U.S. debt ceiling — and Standard & Poor’s decision to downgrade the nation’s credit rating — Sutton noted that economists expect quick, large swings in the market, like rough seas.

“The current situation is a trough and we will eventually bounce back,” he wrote.

Sutton also noted the continued shortage of drivers and the fact that many shippers, receivers and carriers are shifting to spot markets and load boards as capacity becomes tighter and tighter. This could lead to even higher freight rates in the not-too-distant future.

Sutton also pointed to data from the Sylectus system that support those ideas, including an all-time high number of truck searches and load postings as well as the highest rates in seven years of Sylectus data.

Another good indicator is the financial performance of publicly traded trucking companies, which are posting strong first- and second-quarter earnings, attributed mostly to higher rates.

Sutton advises that with a positive business environment in place right now for trucking companies, those same companies should take advantage of the current conditions to raise rates and cull questionable customers; focus on freight that delivers the best return; build a strong team; keep debt low and invest in topnotch technology.