New boxship orders beat October deliveries
The U.S. economy is recovering, albeit slowly, and the tepid pace of growth is expected to extend into next year, CEOs of three freight transportation companies that depend on domestic and international goods transactions said Monday.
Freight volumes accelerated at the tail end of 2009 through the first half of this year, as companies sought to replenish some of the stocks depleted during the recession, but has now flattened as consumer demand remains weak amid a slumping housing market and high unemployment.
The best that can be said, according to the executives, is that economic activity is not getting worse.
'Anything compared to 2009 feels really good. It's still a long way from where the peak was' in early 2008, said Matthew Rose, who heads BNSF Railway, at a tripartite freight transportation conference in Fort Lauderdale, Fla.
| Lofgren |
'I don't think we're going to see a wildly different year than this one,' Christopher Lofgren, president and chief executive officer of trucking and intermodal giant Schneider National, said.
Michael White, president of Maersk Line North America, echoed previous forecasts that the container industry is in for a prolonged period of 3 percent to 5 percent annual growth rates compared to the 9 percent to 10 percent growth enjoyed earlier this decade. White said he was 'cautiously optimistic' about business next year, which will heavily depend on how long factories in China are closed for the Chinese New Year.
'We're seeing a little less of a tail-off than one would expect this time of year,' White said, referring to the normal holiday season shipping pattern.
Rose said freight growth will have to mirror the broader economy or else companies will go through another round of inventory clearance before placing orders again.
'What we need is consistent GDP growth. You can't run freight volume in excess of GDP for a prolonged period of time,' he said. ' Eric Kulisch