This Editorial appears in the Feb. 17 print edition of Transport Topics. Click here to subscribe today.
The unrelenting winter of 2014 delivered another massive storm last week, bringing with it more economic uncertainty and higher fuel prices.
For the second time in less than a month, much of the southeastern United States battled a major ice event. The storm then brought additional snow, freezing temperatures and general misery to the rest of the East Coast. It even took aim at Transport Topics, forcing us to close this edition a full day earlier than usual.
But even with phrases such as “record-low temperatures” and “historic storm” becoming common, it has been remarkable to see trucking’s ability to minimize the storms’ effects.
Fleets are using social media to provide real-time operational updates and to make sure customers can check on the status of a shipment.
Still, it seems this winter’s onslaught will leave a mark long after the last snow pile has melted.
Dennis Lockhart, president of the Atlanta Federal Reserve Bank, said upcoming economic data likely will be weak because of the weather.
A glimpse of that already may be showing in reports on automobile sales, manufacturing, and the job market.
For trucking, the most immediate effect can be seen at the fuel pump.
The U.S. diesel average has increased 10.4 cents over the past three weeks. The spikes have been far more dramatic in the Northeast, where distillate stocks have been drawn down in order to meet demand for heating oil.
The general acceptance of fuel surcharges by customers takes some of the sting from sticker shock at the pump. But the combination of rapid diesel price increases and potential slower consumer spending has to raise concern.
About the only thing “hot” right now is the debate on how much this winter will really affect the economy?
Those economists downplaying the weather suggest any small first-quarter slump can be made up over the rest of the year. Others suggest the weather may be disguising a real slowdown in the labor market.
Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said in a speech last week it could be “another couple of months before we have a better read.”
Trucking has gone about its business for about five years now amid “economic uncertainty.”
In fact, the lessons learned during these difficult years should provide a sense of relief any real economic damage will be minimized.
But one other reason for hope: The first day of spring is just over a month away.
