Follow the freight

Where should you point your trucks to keep them full in an economy that no longer seems to need as many trucks as it did last year? For now at least, Texas looks like a top destination.

Where should you point your trucks to keep them full in an economy that no longer seems to need as many trucks as it did last year?

For now at least, Texas looks like a top destination. After lagging the nation in the first years of recovery from the 2001 recession, the state is now a leader in economic and population growth. Personal income has risen faster in Texas than nationally for seven straight quarters. Population last year grew more than twice as fast as the national rate. Job growth and house price appreciation have also been above average in the latest readings.

Texas is again benefiting from elevated oil and natural gas prices. But now the state is also seeing investment in wind energy and coal-fired power plants. The new Toyota Tundra plant is just one of several reasons San Antonio has become a destination for truck traffic. Dallas-Fort Worth, Houston, Austin, El Paso and parts of the lower Rio Grande valley are all generating more truck trips and look as if they will do so for the foreseeable future.

Oil and gas are just two of the resources that help explain the upturn in Rocky Mountain states such as Wyoming and New Mexico. Those states, along with parts of Montana, Idaho, Utah, Colorado, Nevada and Arizona, are seeing a revival of hardrock mining activity. Gold, silver, copper and other metals have gotten pricy enough to draw new investment in played-out or overlooked areas. All of these states have been attracting more residents and income than in past years.

Corn and soybean-growing regions of the Midwest should do better than in recent years as demand for ethanol drives up corn prices. One spot in the corn belt — Greensburg, IN — is fast becoming a construction and manufacturing destination as well, now that Honda has broken ground on a $550-million auto plant that is scheduled to open in the fall of 2008.

Other pinpoints on the map are promising markets for very specific reasons. Bulging orders for airliners and micro jets will keep trucks full in a number of corridors, including the Seattle area, Wichita, and other points where airplanes and their components are assembled. New York City is currently brimming with construction, retail sales, financial market activity and other sources of trucking revenue. Numerous scattered locations are generating trips to supply the demand for nonresidential construction supplies and for the equipment to fill those new facilities.

Not every location is looking better, however. Large swaths of Michigan, Ohio, Indiana and other states are suffering, along with the not-so-big three automakers and their suppliers. Michigan's furniture and appliance manufacturers are being hurt by the deep downturn in sales of new and existing houses. Furniture producers in North Carolina and Virginia, carpet plants in Georgia, lumber mills across the Northwest and the South, and other suppliers to home builders and furnishers have all cut their calls to motor carriers.

Many of the markets in Florida that flourished from home- and condo-building are now dormant as destinations for both freight and household goods movers. Las Vegas and Phoenix have also lost a bit of appeal, although there is still a lot of nonresidential building to sustain carriers in those markets.

The bottom line: Big problems for home builders and some automakers, plus the thousands of businesses that depend on those industries, have turned some formerly hot destinations into forlorn way stations. But spots that were barely visible on a trucker's map a few years ago have become beehives of activity. Overall, the economy, and the demand for trucking, should keep growing in '07, but it'll take more hunting to find the honey.

TAGS: News
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