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Riding the U.S. and Global Economic Rebound - Opportunities and Challenges. Randy Mullett Vice President - Government Relations & Public Affairs, Con-way Inc. FHWA Talking Freight Webinar February 16, 2011. Con-way Today – who we are. - PowerPoint PPT Presentation
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Randy Mullett
Vice President - Government Relations & Public Affairs, Con-way Inc.
FHWA Talking Freight Webinar
February 16, 2011
Riding the U.S. and Global Economic Rebound - Opportunities and
Challenges
Con-way Today – who we are
2
• $5.0 Billion Industry Leader in Freight Transportation and Logistics• Con-way Freight
• Con-way Truckload
• Menlo Worldwide Logistics
• 30,000 employees worldwide•Over 500 operating locations
• 11,500 trucks, 35,000 trailers, 20 million sq ft warehouse space globally• 150,000 customer pickups and deliveries daily in N. America
• Nearly one billion miles annually moving freight on USA highways
• Consume 150 million gallons of diesel fuel annually
Trucking / Intermodal Statistics
•Over 500,000 trucking companies in the US• 97% have fewer than 20 trucks• Pay 40% of HTF total and drive 13% of the miles
• 70% of all goods (by weight) in the US move by truck• 83% by value• 97% of all consumer goods
•Future modal shares are expected to stay fairly constant • Over 80% of US communities are served only by truck• Shipments traveling >500 miles only 13.4% of the truck freight
market• If rail intermodal capacity doubled by 2020, market share will be only
1.8% vs. today’s 1.5% if capacity stayed constant
A Framework to Remember
We can not separate
economic growth from the
growth of transport
resources and infrastructure.
Motor Carrier Motor Carrier TrendsTrends
DemandDemand
Source: ATA
ATA’s For-Hire Tonnage Index ATA’s For-Hire Tonnage Index
Seasonally Adjusted; 2000 = 100
Through December 2010
In 2010 Truck Tonnage was up 5.7%
Source: ATA
ATA’s For-Hire TL Loads Index ATA’s For-Hire TL Loads Index Seasonally Adjusted; 2000 = 100
Through November 2010
Sources: Department of Commerce and ATA
Total Business Inventories-to-Total Business Inventories-to-Sales RatioSales Ratio
(Includes retail, wholesale, and manufacturing; Through November 2010)
Source: ATA’s Trucking Activity Report
Loads Jan - Nov 2010 Compared with Same Loads Jan - Nov 2010 Compared with Same Period in 2009Period in 2009
Motor Carrier Motor Carrier TrendsTrends
SupplySupply
Source: Avondale Partners, LLC
Trucking FailuresTrucking Failures
Failures only includes fleets Failures only includes fleets with at least five truckswith at least five trucks
Source: Wards
U.S. Class 8 Truck SalesU.S. Class 8 Truck SalesMonthly Retail Sales; Through December
2010
Annual Figures
2005:253k
2006:284k
2007:151k
2008:133k
2009: 95k2010:
106k
Source: ATA
For-Hire TL Supply vs DemandFor-Hire TL Supply vs Demand2005 = 100
Through November 2010
TL Loads Index
TL Tractor Count Index
Oversupply
Long-Run Freight Long-Run Freight Transportation Transportation
Outlook Outlook
Growth in TonnageGrowth in Tonnage Total Increase from 2009 to 2021Total Increase from 2009 to 2021
WaterborneWaterborneRail CarloadRail Carload
TruckingTrucking
Rail Intermodal
AirAir
Pipeline
Source: U.S. Freight Transportation Forecast to 2021
Distribution of Tonnage by Mode: 2009 vs 2021Distribution of Tonnage by Mode: 2009 vs 2021
Source: U.S. Freight Transportation Forecast to 2021
2009 2021
Source: IHS Global Insight
Crude Oil Prices Crude Oil Prices WTI, US$ per BarrelWTI, US$ per Barrel
Source: Energy Information Administration
On-HighwayOn-Highway DieselDiesel PricesPrices
PricePrice Per Gallon Per Gallon
Why does it matter?
•Freight in all modes will increase (26% by 2020) with resulting capacity constraints
•Energy and sustainability concerns will increase.
•Rates will increase. Delays will occur. Economy will be affected.
•Supply chain disruptions will result in “near sourcing”
•Feds, States, and Communities will rediscover that freight and freight infrastructure are the underpinnings of economic development.
Challenges
•CSA
•Hours of Service Rules
•Fuel / Energy / Sustainability
• International Competitiveness
• Livability
•Physical Capacity / Productivity
Railroad, Airline, Trucking, and Private BusinessTotal Factor Productivity 1987–2008
Politics: Potential opportunity?
•Underlying issues that existed during our freight capacity “crisis” are unchanged
• Changes in Congress
• No Tax Increase Pledge
• No Earmarks
• Tea Party Influence
• State Responsibility
Remember
ECONOMIC GROWTH
cannot be separated from
TRANSPORT GROWTH.