NEW YORK, NY--(Marketwire -08/21/12)- Despite concerns of a major global economic slowdown, the U.S. trucking sector's recovery continues to gain momentum. The (ATA) advanced seasonally adjusted For-Hire Truck Tonnage Index saw its biggest monthly gain of the year rising 1.2 percent in June. Five Star Equities examines the outlook for companies in the Trucking Industry and provides equity research on YRC Worldwide, Inc. (YRCW) and Arkansas Best Corporation (ABFS).
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The Trucking Industry has experienced a slow, but steady recovery in 2012. The June increase followed a 1 percent drop in May, and was 3.2 percent higher than a year ago. "June's increase was a pleasant surprise, but the lower year-over-year gain fits with an economy that has slowed," said Bob Costello, chief economist for the association.
Avondale Partners analysts "failures report", released earlier this year, showed only 160 companies with an average fleet of 13 trucks went under during the first quarter of 2012. That number compares with 295 failures during the first quarter of 2011.
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The FTR's Trucking Conditions Index in June fell half a point to 4.5. According to FTR a reading above 0 represents a positive trucking environment, and a reading above 10 signals that volumes, prices and margin are in a favorable range for carriers.
"We expect the index to further weaken slightly during the summer months but to remain in positive territory," says Jonathan Starks, director of transportation analysis for FTR. "Improvement will resume as we head into the Fall peak as traffic builds and the delayed introduction of new federal regulations begin to restrict capacity. This trend will continue into 2013, culminating with the introduction of new Hours of Service rules by the FMCSA in July of next year. Given our expectations of a rising driver shortage, combined with a tailwind versus year-ago fuel prices and continued modest freight growth, the index should steadily increase into 2013."
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