Though freight is still projected to grow overall in 2005, rising fuel prices and scrambled operations from the damage inflicted by Hurricane Katrina on the Gulf Coast is going to put added pressure on the trucking industry’s bottom line, according to Gov. Bill Graves, president & CEO of the American Trucking Associations (ATA).
“ATA still anticipates that freight tonnage will grow between 2.25 and 2.75% this year, and does not at this time have plans to adjust those figures,” he told FleetOwner.
“In the short-term, Katrina [is going] to negatively impact trucking because normal trucking operations in the regions hit by Katrina have come to a near grinding halt,” Graves added. “The storm is also forcing supply chain patterns to change for the time being as freight is re-routed. Freight that normally came by ship into the port of New Orleans, for example, is being redirected to other ports, which in turn puts pressure on local trucks in those areas.”
Graves noted that several carriers are contracting with the Federal Emergency Management Agency [FEMA], which is increasing their freight hauls at this time. Over the longer term, rebuilding of the areas hit by Katrina should positively impact trucking because construction materials and goods to restock inventories all will have to be trucked into the region, he added.
Yet rising fuel prices – pushed higher by the damage to the Gulf Coast’s energy production infrastructure – are proving to be a major problem. “The industry is projected to spend an unprecedented $85 billion on fuel this year. That's a $23 billion increase over the amount the industry spent in 2004,” said Graves. “This is significant because approximately … 80% of America’s communities get the freight they consume only from trucks. Ultimately, rising fuel prices have the potential to increase the cost of everything that is moved by truck.”
He also pointed out that trucking is doing everything it can to help with hurricane relief efforts. “This industry is stepping up to the plate and contributing significant amounts of money, equipment, and supplies because we recognize the essential role of trucking in delivering aid during this critical time,” Graves noted. “It’s true that as an industry we have to do a better job of educating people about the fact that trucking is an essential part of the economic food chain. But right now we’re simply focused on how we can help because it’s the right thing to do.”
To discuss the Katrina disaster and its effect on the trucking industry or to share your personal experiences, please visit FleetOwner's Katrina Blog at blog.fleetowner.com/katrina.
To view the archive of FleetOwner’s ongoing Katrina news coverage, go to www.fleetowner.com/katrina.
