In The News
Federal Reserve Report Paints Rosy Picture of Transportation Demand
Several regions across the U.S. are seeing a pickup in demand for
freight transportation services, according to the Federal Reserve.
In its latest Beige Book report released Wednesday, the Federal Reserve
said the freight transportation industry has reported gains in the
Cleveland, Atlanta, Kansas City, Dallas, and Philadelphia districts.
Boston, Minneapolis, and Dallas reported a pickup in demand for some
consulting firms.
While freight transport executives in Cleveland said volumes are up,
they expect the rate of volume growth to begin to moderate. One contact
there was worried about the strength of consumer demand. Several others
have tried to negotiate rate increases, with some success.
At the moment, fleets in Cleveland are buying equipment at replacement
levels, but the need to replace equipment may grow toward the end of
this year, as fleets age and demand picks up, the report said. However,
many there said prices for tractors and trailers are rising.
In addition, Cleveland transportation executives are hiring for
replacement purposes only, but they expect to add capacity soon as
volumes grow.
In Atlanta, freight activity was higher on a year-over-year basis, due
to increased shipments of motor vehicles, metals and chemicals, the
report said.
Demand for transportation services improved in Dallas as well, with
several contacts there noting increased cargo volumes across industry
sectors. However, executives remained cautious about future demand.
One fleet owner in Dallas was offering signing bonuses for truck
drivers, while a few other companies reported difficulty finding skilled
workers, a sign of an upcoming driver shortage.
In Kansas City, growth in manufacturing activity eased slightly in June,
while transportation reported solid growth in sales and activity.
Transportation firms saw an increase in activity when compared to both
the previous period and a year ago. Some firms continued to have
difficulty finding qualified drivers, and most transportation firms plan
to increase their capital spending the next six to 12 months.
Transportation executives in Philadelphia also reported increases in freight volume.
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