Editorial: Life Is Good

There was some interesting advice offered by two of our industry’s best-known economists last week to fleet executives who were attending the National Tank Truck Carriers annual conference in San Francisco.

The most important word was that trucking is well into a solid economic recovery. While that’s not necessarily news, the pair urged the executives not to be misled by the political rhetoric or the flood of statistics coming out of every corner that question the state of the economy.

As one of the economists, Noel Perry of Transportation Fundamentals Inc., put it: “Stop complaining. This is a pretty good market.”

The next two bullet points were: The recovery should continue for at least a few years; and fleet managers need to keep a close eye on costs, as various developments are putting pressure on the industry, especially for equipment and for drivers.

Perry and American Trucking Associations’ Bob Costello generally agreed on the current state of affairs and said things were likely to remain positive for at least the next few years.

Perry also emphasized the growing driver shortage, which he said could reach 500,000 by next year, assuming new federal regulatory programs are fully implemented by then.

He said the changing demographics of the nation, with far fewer young people entering the labor market as birth rates decline, would exacerbate the driver situation.

Perry also warned that, eventually, the piper must be paid, and taxes will rise, along with interest rates, as Congress finally gets around to paying for the deficits being racked up now.

Costello, meanwhile, pointed to rising equipment prices as a major concern — especially for smaller fleets.

Today, with tractor prices easily reaching $125,000 per vehicle, fleets are facing double jeopardy in that the trucks they are trading in are worth less than usual because they are older than usual.

Most fleets delayed purchases during the recession, and, as they look to renew their fleets now, see they must finance much more than in years past.

Costello said this is the new top issue for the executives who run smaller fleets, replacing fuel as the biggest headache.

In all, the two economists were positive and urged fleet executives to enjoy the good times while keeping a wary eye on expenses. Sounds like good advice.