Aftermarket

FTR Conference: Slow Recovery in the Cards For Freight Industry

September 11, 2009

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Despite recent news that several economic indicators are hitting a bottom, don't expect the freight market to make a sharp turn
. The recovery will be slow and uneven, according to speakers at the FTR Associates Freight Transportation conference, on Aug. 25-27 in Indianapolis.

The event drew more than 170 attendees, who got the economic run-down from professionals from the Federal Reserve, Wall Street, freight carriers, shippers, suppliers, and consulting firms as well as FTR Associates itself.

Speakers at the conference attribute the anticipated slow recovery to subdued consumer spending and continued high unemployment. Unlike previous recessions, economic growth will be subdued despite the depth of the current downturn.

The conference topics also touched on the fact that freight transport will continue to be a buyer's market, at least for the time being, and this will put more pressure on carrier margins.

There is also no anticipated end to over capacity, as it is expected to continue. In some cases, this is caused by banking's reluctance to foreclose on heavily discounted assets.

Both rail and motor carrier equipment sales should lag behind the improvement in freight, recovering slowly. Sales are not expected to reach 2006 levels for a decade or more, according to conference speakers.

In addition, carriers should not expect to reach equilibrium until 2011, unless there's a more robust recovery.

Next year's FTR conference has been slated for Sept. 14-16, 2010.


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