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Grim outlook for the next decade

July 7, 2014
The mood of the American public, it seems, is souring about the prospects for our nation over the next 10 years – and to a degree this glum view is reflected in similar portents trucking experts are forecasting for the U.S.
The mood of the American public, it seems, is souring about the prospects for our nation over the next 10 years – and to a degree glum this view is reflected in similar portents trucking experts are forecasting for the U.S.

According to the America Looks to 2024: The Atlantic/Aspen Institute Survey released last week, some 65% of respondents are not convinced the country will be on the right track over the next 10 years, with two-thirds saying they do not believe America will be considered the “land of opportunity” by decade’s end and seven in 10 Americans not certain that working hard and playing by the rules will bring success in 2024.

The survey – based on the responses of 2,001 Americans polled online by research firm Penn Schoen Berland (PSB) and Burson-Marsteller at the end of May – also discerned a grim view of America’s global prospects.  Only three in 10 envision America’s global standing being on the rise in 10 years, according to the poll, with 68% believing that China, not the U.S., will be a major superpower by decade’s end – while 53% thinking that China will be the world’s largest economic force by 2024.

Here are some other findings from this survey to chew over, with some transportation tidbits included:

  • Two-thirds of Americans are not convinced the U.S. will be more unified in 10 years.
  • Some 54% think government will be bigger in 10 years, but most do not say it will be more effective, with 35% believing it will be less effective and 33% uncertain.
  • By 2024, 19% of Americans expect the U.S. to engage in armed conflict with China, 31% foresee conflict with Russia, and nearly half – 45% – predicting armed conflict with Iran.
  • Some 20% of Americans expect to buy an electric car in 10 years.
  • Another 69% expect gas prices to rise by more than $2 per gallon over the next decade.
  • Nearly half (47%) think airline delays will be longer in 10 years than they are today.
  • More say they will read printed books (50%) than printed newspapers or magazines (36%) by decade’s end.

On the plus side, a lot of folks think America is going to retain its technological leadership:

  • A majority (63%) believe technology has made their lives better and will continue to do so in 10 years.
  • Some 44% think technology entrepreneurs will most likely be the nation’s future leaders.
  • Most foresee technology surrounding them in 10 years, either in the form of robots (59%), drones (70%) or medicine capable of monitoring and reporting changes in the body (60%).

So how might such viewpoints cited above from everyday Americans impact freight?

Well, for starters, recent surveys from the business world reveal a still-decidedly mixed mindset when it comes to growth opportunities. (You can click here for one such example).

On top of that, Christine Lagarde (at right), managing director for the International Monetary Fund (IMF), took a very cautious view of broad global trends during a speech before the Rencontres Economiques d’Aix-en-Provence in France this weekend.

“Global activity was unexpectedly weak earlier in the year, in part due to temporary factors, but is expected to gain momentum in the second half of the year and to accelerate further in 2015,” she said. “Advanced economies are strengthening, although their recovery remains tepid and uneven.”

She noted in particular that where the U.S. is concern, after a more disappointing than expected first quarter – when gross domestic product (GDP) registered a hugely unexpected 2.9% decline – that a “meaningful rebound in activity” is now underway, with the IMF as a result expecting America economic growth to accelerate over the coming few quarters.

“Of course, this hinges on a careful withdrawal of monetary support by the Fed, and agreement on a durable medium-term fiscal plan,” Lagarde cautioned.

The challenges for trucking remain particularly acute even though freight volumes are holding strong at the moment.

“Because of the adverse weather conditions faced in 1Q14, truckers have benefitted in the 2Q14 from intermodal traffic coming back to the highway due to poor service and operating conditions on the rails—especially in and out of Chicago, the nation’s largest intermodal hub,” noted John Larkin, managing director and head of transportation capital markets research for Wall Street firm Stifel, Nicolaus & Co., in a recent research note.

“As well, some freight which was delayed in 1Q14 due to weather has shifted into the 2Q14, boosting volume in the current quarter. Freight is also flowing earlier in the 2Q14 than in the 2Q13, as the most recent winter was harsher than the previous winter but didn't hang on as long,” he added.

“But remember, the 2Q is now the peak season as ‘the law of big stuff’ comes into play,” Larkin (at right) stressed. “Fertilizer, grass seed, rototillers, pool furniture, etc. cannot be miniaturized in the way that modern holiday gifts can. So, while demand has looked good of late, it is uncertain how much will be sustainable into the latter half of the year given the persistently mediocre growth of the underlying economy and continuing struggles experienced by the average American who is stuck between a rock and a hard place – i.e. rising taxes and living expenses superimposed on declining real income.”

He also noted that the continuing shortage of truck drivers and changes to the “work mindset” of the U.S. labor pool could aggravate freight headaches for trucking down the road.

“The driver shortage has become widespread across the truckload, dedicated, private fleet, LTL, and drayage sectors. With carriers trying every trick in the book to recruit and retain drivers, it is not clear what will happen when the Fedeeral Motor Carrier Safety Administration’s litany of additional safety regulations kick in over the next few years. Nor is it clear what will happen if the economy were to shift into a higher gear—finally.”

It all adds up to quite a muddled mix of positives and negatives for the coming decade – so let’s just hope the dice rolls in favor of the U.S. when all is said and done.

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