All economic indicators say that the economy is weathering the storm of high fuel prices and the recent hurricanes, and that trucking hasn’t seen a major negative impact, according to Tavio Headley, staff economist for the American Trucking Associations.
Speaking to fleet executives at this week’s 2nd annual Randall-Reilly Trucking Fall Symposium in Phoenix, Headley said the United States is currently enjoying a “good, but not great, economy,” thanks to a small dip in consumer spending, declining consumer confidence and rising inflation due to hurricanes Katrina and Rita.
Manufacturing output is 3.0 percent higher through September 2005 than at this time last year, and strong holiday retail sales are predicted, Headley said, as indicated by current levels of consumer spending and employment. Gasoline prices hopefully won’t have much impact, he said. “Adjusted for inflation, they’re not the worst they’ve ever been,” he said.
Regarding truck freight, revenues are flat and tonnage, while not at its peak, remains high. Less-than-truckload carriers are enjoying the most growth in volume and revenues, at 9.0 percent and 17.9 percent, respectively. Capacity is being added and more growth is predicted, thanks to fleets replacing older trucks; a pre-buy before 2007 emissions standards go into effect that “could be much larger than 2002,” Headley warned; and some business-driven capacity requirements.
The driver shortage only will get worse, Headley said, citing the recent study by Global Insight that shows the employment shortfall worsening from 20,000 in 2004 to 111,000 in 2014. An aging work force, slowing growth in the overall labor market and clogged highways won’t help driver recruitment efforts, Headley says. To find more drivers, Headley said, carriers must raise wages, improve drivers’ quality of life, recruit more minorities and change their operating practices.
There’ll be plenty of freight business to go around in the future, with trucking earning $1.1 trillion in revenues by 2016 while hauling 13 billion tons by 2016, a 32.5 percent increase from current levels.