Editorial: Looking Toward 2012

There is every reason to believe that 2012 will be a good year for the trucking industry, based on what’s happened so far this year and on reasonably strong U.S. economic growth projections.

Last week, American Trucking Associations’ freight tonnage index for October showed year-over-year growth for the 23rd straight month, going back to December 2009.

The freight level last month was 5.7% higher than the year-ago level, according to ATA, and provided still more evidence, the group said, that the U.S. “economy is growing and not sliding back into recession.”

ATA Chief Economist Bob Costello said the growth in manufacturing has been the driving force behind trucking’s business improvement, which has exceeded overall GDP improvement.

And much of that growth in manufacturing has been spurred by rising auto and light-truck sales, with another economist predicting that light-vehicle sales growth during the fourth quarter could reach 10%.

And while economic expansion this year has been relatively mediocre, it has been sufficient to boost the financial performances of most fleets, in large part because of the shrinkage in capacity caused by several years of recession.

But even that lackluster performance has helped fleets boost rates and profitability and has shippers and brokers worried about what 2012 may bring.

“Shippers are trying to lock up capacity as best we can now,” said one official at Owens Corning, a major shipper, in expectation that additional growth in the new year will create a shortage of available trucks to move products.

A survey of shippers and brokers at the recent Intermodal Expo in Atlanta showed widespread concern that capacity is likely to get appreciably worse if the federal government follows through on its threat to cut allowable truck driving hours to 10 per day from the current 11.

An official of another major shipper, True Value Hardware, told our reporter that if driving hours are cut, “It will hurt everyone. It will make trucking operations . . . much less productive. It will put more trucks on the roads. It will increase the costs of goods and services, and constrain the economy much further.”

Clearly, shippers understand the potential ramifications of cutting driver hours. Now we need to hope that officials of the White House Office of Management and Budget, who are currently weighing the proposal from the Federal Motor Carrier Safety Administration, get it as well, before this administration makes a disastrous mistake.