Economy Expands as Driver Shortage Continues to Constrain Capacity, Fed Says
The national economy continued to expand from late November to early January as regions reported capacity constraints from a lack of drivers, the Federal Reserve said.
The New York region reported business conditions for trucking improved in late 2014, on strong demand and falling diesel prices, and also that truck drivers are in high demand, the Fed said in its Beige Book report released Jan. 14.
Cleveland reported trucking contacts are optimistic in their outlook and believe strong growth trends should continue this year.
Freight volume increased and profit margins improved due in part to lower diesel fuel prices. Carriers reported they are encouraged by amendments to the hours-of-service rules that were included in the recently passed federal omnibus bill.
Consolidation in the freight industry is expected to continue in Cleveland, with capital spending in 2015 projected to be strong as funds are allocated for replacement and expansion. Contacts said their ability to attract and retain truck drivers is critical to expanding capacity, the Fed reported.
In Atlanta, trucking and logistics contacts reported significant increases in demand while capacity constraints due to a lack of drivers continued to slow growth, according to the Fed.
Minneapolis said contacts reported a continued shortage of truck drivers.
In Dallas, transportation firms said cargo volumes have held steady or increased. San Francisco reported shortages of truck drivers contributed to increases in shipping costs in some areas, even as fuel prices declined.
The Fed releases its Beige Book report eight times a year. The report, which covered Nov. 24-Jan. 5, was prepared by the Federal Reserve Bank of San Francisco.
For the full report see below.
