Better, But Not Yet Good Enough

The top “take-aways” from the 2010 Management Conference & Exhibition last week seemed to be: Things are better than they were; things are not as good as they could be; and things are going to get even better.

The mood of the event this year in Phoenix was decidedly brighter than the 2009 version in Las Vegas, where many of the participants seemed almost dazed by the lowly state of the freight transportation business. (Click here for p. 1 story, this week’s issue.)

This year, nearly all fleets reported improved load levels and increased revenue, even as they expressed disappointment that both trends weren’t even higher.

But there was little talk of the nation’s economy falling back into a second recession.

Rather, most executives said they were moving to get their fleets ready for busier days ahead, with some of them even reminding their peers that it’s often more difficult to manage during boom times than it is during busts.

The fleets and the equipment makers in Phoenix for the show all seemed to have been prepared far better for the recent economic downturn than they had been for previous ones. This readiness made it easier for them to weather the worst business climate since the Great Depression and allow them to be around for the recovery.

Speakers at the annual economics panel at the meeting predicted far better times ahead, with American Trucking Associations’ chief economist, Robert Costello, predicting that, by the time of the meeting next year, “we will be on the cusp of some of the best years in trucking’s history.”

And it’s been a long time since we heard that kind of talk during an annual ATA meeting.

Still unresolved as MCE ended and attendees headed home were a string of vital decisions hanging fire in Washington, especially the new hours-of-service rule.

Trucking seems widely convinced that the new HOS rule is going to be a serious problem, with most experts predicting that the new proposal will further restrict allowable driving hours and expand the minimum time necessary for a driver to restart his or her workweek.

Fleets are concerned that the rule will increase their costs and reduce their freight-carrying capacity, just as the economy heads into a pronounced expansion. And this forced change would modify a rule that has helped trucking have its safest years in history.

However, an improving economy may well make it easier for fleets to recover any jump in operating costs sparked by the new HOS rule.