Bob Costello, ATA chief economist
Freight volumes continue to be varied, depending on the sector, and trucking’s outlook will be cloudy in the months ahead, Bob Costello, the chief economist for the American Trucking Associations (ATA) in his presentation to the ATA Management Conference and Exhibition taking place in Las Vegas, NV.
ATA is the largest national trade association for the trucking industry.
“Some groups, like tank truck and flatbed, are doing very well, while conversely you have other areas like dry van that are underperforming,” he said.
Despite the fact that volumes overall are going up, capacity “remains relatively in balance to demand.
“However, if the overall economy were to surprise us on the upside - with, say 3 percent GDP growth for several straight quarters, we would not have enough trucks to handle the corresponding increase in freight,” Costello observed. “This speaks to the continued threat of our current quantitative driver shortage of 20,000 to 30,000 drivers potentially getting worse in the future.”
He said that while better than expected growth would be a surprise, generally the risk of recession or slower growth was more likely.
“The biggest risk to trucking would be a backslide into recession either because of the collapse of the Euro, or more likely, uncertainty related to the ‘fiscal cliff’ at the end of the year,” said Costello. “It is very likely that Washington simply punts on resolving the issues surrounding the cliff into 2013, thus limiting GDP growth to less than 2 percent until late in the year.”
Another area of concern that he noted was the “sharp deceleration in manufacturing orders which will limit manufacturing output and thus put a damper on truck volumes in the coming months.”