Panel: Cheaper Oil, Interest Rate Drop May Help Trucking in 2001

Lower oil prices, moderate economic growth and a drop in interest rates should bode well for trucking in 2001 — at least for companies that survive the bankruptcies and consolidations predicted to sweep the industry.

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	Analyst: Truckload to Beat S&P 500 in 2001 Audio clips from this year's forum

A panel of experts delivered that contradictory message at the 12th annual Transport Topics Management Outlook Forum, held Dec. 4 at American Trucking Associations headquarters in Alexandria, Va.

“I don’t think it’s going too far out on a limb to predict that the trucking industry, particularly truckload carriers, are headed into what I call ‘the perfect storm,’ ” said David R. Goodson, president of Class 8 Solutions in Eagan, Minn., a consulting firm that specializes in analyses of driver pay and truckload operational issues. He is also editor of the National Survey of Driver Wages.

“All it will take, really, to get to ‘perfect storm’ conditions is for the Federal Reserve [Board] to force the economy into a hard, rather than a soft, landing.”

But a recession is not likely, according to Edward M. Wolfe, an equity research analyst for Bear, Stearns & Co. in New York. Wolfe said he expects the Fed to lower interest rates as soon as March, which would result in a 3% rate of growth in gross domestic product by the end of the year.

The first signal that the Fed is inclined to cut interest rates came from Chairman Alan Greenspan on the day following the Management Outlook Forum. Greenspan’s announcement that a rate cut may be needed to head off a downturn in the economy sent stock prices soaring, resulting in the biggest one-day jump in Nasdaq history and better than a 3% boost of the New York Stock Exchange.

A brief cooling of a hot economy would actually help revive trucking stock prices, which have been moribund for the past two or three years, Wolfe said. “When people can smell easing [in interest rates], this group starts to feel better.”

For the full story, see the Dec. 11 print edition of Transport Topics. Subscribe today.

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