According to the second estimate of gross domestic product (GDP) for the third quarter from the United States Bureau of Economic Analysis (BEA), economic growth rose 2.1%, which is a faster pace growth than originally expected. This revision reflects that domestic demand continues to grow at a steady pace; consumer spending, business fixed investment, and residential investment aided in the boost. Read the December Market Update for more highlights on key factors that impact the transportation industry in North America. Then, share your thoughts on these topics and other issues that affect your business.
Large Scale Market Indicators
According to the Los Angeles and Long Beach ports, the amount of time trucks spend inside terminals has decreased to averages that have not been seen since 2014. The average time for receiving or dropping off containers during nights and weekends is 48.3 minutes. During the daytime, Monday through Friday, the average is 46.3 minutes. These numbers are down from the hour-plus port times that were common from the stretch between November 2014 and spring of 2015. These dropping averages suggest that the severe congestion caused by the International Longshore and Warehouse Union (ILWU) slowdown is over.
The American Trucking Associations’ (ATA) truck tonnage index jumped 1.9% in October. The index was at 135.7, just below the all-time high of 135.8 in January 2015. “It was good to see tonnage increase nicely in October after contracting a total of 1.6% in August and September. However, tonnage has been overall pretty flat this year,” said ATA Chief Economist Bob Costello.
Orders for large trucks plunged to a three-year low in November. Orders for new Class-8 trucks totaled 16,600 for the month, which is down nearly 60% from the same month a year ago, and down 36% from October.
Only about 9% of fleets adjusted pay in the third quarter, versus 42% in the same quarter last year. According to the National Transportation Institute, the two main factors are a softening economy and the fact that third quarter of 2014 saw huge pay increases. Read more.
House and Senate negotiators struck an agreement on a $305 billion highway bill that would extend federal transportation funding for five years, paid for with gas tax revenue and $70 billion in offsets from other areas of the federal budget. Read more.
Diesel prices dropped another 3.7 cents for the week ending November 23, hitting the lowest mark of the year. The average price of a gallon of diesel is now $2.445 nationwide, the lowest price of 2015 and the lowest price since June 1, 2009.