Senior Consultant Noel Perry said the forecast for truckload growth during the next year looks very much like the GDP pattern and is about equal to the overall rate we've had since recovery started. "A 4% truckload growth rate should do more than enough to sustain prices and recovery equipment orders, maybe even enough to encourage fleets to order for growth."
As for the driver shortage, Perry said, "We've fallen behind because of cyclical drag." In an upturn, he explained, we go from very small hiring requirements to very large hiring requirements. It is unlikely that anybody's hiring capacity can expand fast enough to keep up, partly because fleets lowered hiring due to the recession.
The government will be magnifying the challenge of driver shortage by adding regulations. Currently, there are 13 agendas running around in Washington. "In the short term, the effect is to disqualify a substantial number of drivers," Perry said.
Perry's forecast for oil prices in 2012 was promising, given the recent trend of rising prices. "We track what OPEC's spare capacity is," Perry said. "When it's high, when people are adding new wells more rapidly than consumption goes up, the market softens. On a fundamental basis in 2012, there is no problem in the oil market. That puts the recent rise in a very important perspective. We know Iran is affecting this."
"I think [the situation with] Iran will simmer down in three to four months and prices will return to equilibrium," Perry said. "I think they will fall after we have this first and second quarter peak."
Also modestly driving up prices are oil companies closing older, less efficient refineries in the east.
"Some really good news about U.S. oil supplies," Perry said, "is that we have actually -- and you'd never know it listening to parties talk about it during election -- reduced dependence on crude oil 20% since 2006."
He said with the natural gas wells we're drilling, we have a major global advantage in price of the fuel, and that has five important implications:
1. It takes lots of trucks to do drilling work -- at least 65,000 full-time drilling trucks.
2. It's feedstock for the chemical industry.
3. Critical input into refining processes helps lower price of refined products.
4. It provides alternative fuel for some transportation applications.
5. It's a good alternative fuel for heating and utilities, and that makes for a good transportation environment.
Perry also said that the U.S. debt crisis will come to a head in several years.
"The U.S. economy will have a gun to its head by mid-decade," Perry said. "It's going to be very difficult for the U.S. to make those hard choices to get our budget back in balance. You have to assume the solution will be late and problematic. At least at first, it will probably be a failure, and when you fail to handle debt problems, first thing lenders do is increase borrowing costs."