The traditional optimism that accompanies the start of a new year is hard to come by right now. Layoffs in the thousands are being announced every day. Despite the Federal Reserve Bank's best efforts, lenders are still unwilling to part with their cash. Home prices continue to slide, yet even with historically low mortgage rates, dropping prices are not bringing back the buyers. All but a few states forecast large budget deficits and say they'll have to raise taxes and cut services to make up the shortfalls. Take a look at any of the major economic indicators and the news is simply bad.
Although there was still hope for some temporary relief from the U.S. Treasury, the Big Three domestic automakers were still twisting in the wind as we go to press. You can debate all day whether the rope they're hanging by and even the wind itself was created by the Big Three themselves or by outside economic forces, but the very real possibility of bankruptcy is deeply unsettling to most of the country. After all, the tough love experiment that let Lehman Bros. go bankrupt didn't work out so well for either the financial industry or our overall economic stability.
While bankruptcy isn't the issue for them, commercial truck makers and their suppliers aren't immune either. They are responding to extremely weak sales with layoffs, plant closings and restructuring efforts while still trying to keep development efforts moving to meet 2010 diesel engine emissions requirements. It's a tough balancing act, especially when truck buyers don't know when their businesses will turn around and give them a reason to buy new trucks.
In trucking, things are just as tough. Freight volumes remain low, and for-hire carriers continue to have excess capacity. On the private side, municipal fleets are constrained by dropping tax revenues, while most company-owned fleets have to deal with the fallout from dropping profitability.
Still, it is a new year and there has to be some good news to raise a glass to, or at least some reason to expect that things will get better sooner rather than later.
At the top of the list has to be the project our 44th President Barack Obama has promised to fast track once he takes the oath of office later this month — a massive infrastructure investment. Trucking has been talking about the long overdue refurbishment of our Interstate system for years. But without this painful recession and the need to pump a lot of jobs and a lot of money into our economy quickly, I doubt we'd have seen the political will from either party to seriously address this issue. Sure, a substantial portion of the money will go to things other than roads, but they're essential things nonetheless — things like schools and water treatment plants. And every one will employ large numbers of trucks.
As part of its effort to bolster the automotive industry, the federal government has also set aside $100 billion to foster development of alternative fuels and more efficient energy distribution systems. As an industry that accounts for a substantial portion of U.S. fuel consumption, trucking can only benefit from any acceleration in the creation of viable alternative fuels.
And finally, we can go into this new year taking some comfort in that well-worn commentator's cliché — all economic cycles, bad or good, come to an end.