PHOENIX. While predicting sluggish growth for the overall economy until the middle of next year, “trucking can do very well under these conditions,” said Bob Costello, chief economist for the American Trucking Assns. (ATA).
Speaking at the ATA’s annual convention, Costello said even better times are ahead, predicting that when the association meets again next year, “we’ll be on the cusp of some of the best years in trucking.”
Costello and two economists from the National Assn. of Manufacturers and the National Retailers Assn., were less enthusiastic about general economic growth in the near future.
Calling the current recover “lackluster,” Dave Huether of NAM said the recovery will remain “sluggish” until the third or fourth quarter of 2011. However, he predicted that U.S. manufacturing will continue to grow faster than the general economy largely driven by exports.
The retail association’s Scott Krugman pointed to eroding consumer confidence as one brake on stronger growth. With the coming holiday season critical for that industry, he said “consumers are still operating as if we’re in recession.”
While renewed strength in the luxury goods segment indicate that “consumers are starting to dip their toes in the water,” Krugman said housing and employment would need to recover before there would be a full return in consumer confidence.
The silver lining in the recession for trucking was the sharp drop in capacity, according to Costello. “We’ve never seen so much supply come out of this industry, but as tough as it was, it’s now starting to pay dividends.” It only took a small increase in freight volumes earlier this year to bring truckload capacity back into balance, “and nothing suggests that any significant capacity will be added in the near future,” he said.
Joining Costello in his long-range optimism, Krugman forecast that the general economy “will be firing on all cylinders by the third of fourth quarter of next year, and 2012 an 2013 will be very good years.”
Even as the industry emerges from recession, it still faces “some of the most significant changing timers confronting trucking since deregulation,” ATA president & CEO Gov. Bill Graves told his members during the meeting’s opening session. CSA, hours of service, electronic logging, infrastructure investment, alternative power, driver pay and growing freight demand were among the list of issues “we’re expected to manage our way through,” he said.
Graves’ state of the industry report drew attention to one issue in particular – raising funds for infrastructure investment. “Roads aren’t free and they’re not cheap,” he said. “Anyone who claims privatization, securitization or monetization is the solution … ought to be subject to incarceration. All those strategies involve collection of tolls, and tolling is nowhere close to being economically efficient as the tried and true old-fashioned fuel tax.”