Editorial: Gaining Strength
Certainly, summer and publication of the Transport Topics Top 100 list in this issue always leave us a bit giddy, but more substantively, we’re happy about a recent streak of positive economic developments that strongly suggests the first quarter’s 2.9% contraction was more of a fluke than an omen.
Consider the 41.3% leap in new truck orders last month. Not only is that a hefty increase from June 2013, but also the actual number of 26,600 net orders is strong by historical standards, yet not outlandish for this year — fleets are clearly lining up to get new Class 8s and some of that interest already has turned into rising retail sales.
The CEO of Navistar International told us last week that quality and operational improvements at his recently troubled company lead him to expect gains in sales volume and market share at least through next year.
New trailers for those tractors to haul also are in demand. May orders were the highest for that month since 1998.
Fleet executives aren’t acquiring rolling stock because it’s cool to own. They’re following tonnage reports that keep rising, measured both year-over-year and in sequential months since January.
The Federal Reserve’s monthly index of industrial production is now the highest it’s ever been, and the Fed has tracked that indicator since 1919.
Investors apparently have noticed these events because trucking share prices clearly have outpaced the Standard & Poor’s 500 index since New Year’s Day.
Even crude oil and wholesale diesel prices have backed off their recent war-induced high points.
We think this is the foundation of a sound economy, but the industry is not on the doorstep of Nirvana.
The lead story in our TT 100 supplement of for-hire carriers in the United States and Canada says that, while combined revenue for the Top 100 grew by 3.1% from the previous year, many of those carriers feel constrained and unable to grow along with customer demand.
Finding enough qualified drivers is extremely difficult, and executive-branch aficionados of truck regulation have made operating safely and efficiently more challenging with the restart provision of the hours-of-service rule.
Congress is another sizable obstacle for trucking and the nation. Yet another week of petulance has passed, and a long-term surface transportation plan is nowhere in sight. A clumsy stopgap for the Highway Trust Fund might be possible, but even that meager dollop of legislative productivity is uncertain.
