This Editorial appears in the April 19 print edition of Transport Topics. Click here to subscribe today.
Several notices pointing toward recovery in trucking and the economy at large are one pleasant side of the news last week.
In the first two exhibits, industry touchstones UPS Inc. and J.B. Hunt Transport Services both said their first-quarter earnings from freight services were notably higher than the previous quarter’s — and in UPS’ case, “significantly” above guidance provided in February.
Also notable was growth in Class 8 truck sales during the past three months — nearly 10% ahead of the same period in dismal 2009.
And Robert Voltmann, president of the Transportation Intermediaries Association, described a “modest positive trend” in broker freight billings, prompting him to say, “As far as we’re concerned, we can call the recession done.”
Before exuberance breaks out, it must be recognized that the good news is allayed by negatives. As Voltmann also noted, many trucking businesses face higher health-care costs, closer tax scrutiny over classification of independent contractors and costs of complying with the coming CSA 2010 safety program.
Moreover, two key economic drivers remain anything but robust: Federal Reserve Chairman Ben Bernanke said the still-moribund housing market and high unemployment remain the country’s biggest economic challenges.
As the week drew to a close, many commentators spoke of another wave of housing foreclosures with the expiration of federal protection and support of owners. Presumably, this prospect would not help the flatbed market, which has had reason to cheer recently but is so tied to construction, including new housing.
An interesting dichotomy appeared in the national press, with the Wall Street Journal trumpeting mounting evidence of strong recovery, thanks to consumer enthusiasm, and The Associated Press releasing its survey of economists, who said recovery would stay sluggish into 2011.
However, we place our bets on the future — near and far term — no trucker is going to overlook the already alarming resurgence of fuel prices. Who can forget the agony of escalation that cursed the industry until the recession took root?
Is another round of fuel spikes headed our way? An upward trend already is suggesting itself, with retail diesel and gasoline prices rising 25 cents or better in eight weeks (see story, p. 1).
Yes, the public driving season is looming, always a price accelerator. And resumption of economic growth could be applying pressure — call it the dark side of recovery.
Whether this is the result of natural or speculative forces, one sad fact remains: Our partisanship-riven government has done little, if anything useful, to stave off another fuel-price shock.
