Analysis: 3 Takeaways From This Year's FTR Conference
Trying to narrow down the single, biggest point made at the annual FTR Transportation Conference would be a fool’s errand. The event was content rich, covering everything from the economy and freight to equipment and everything in between. Business Contributing Editor Evan Lockridge found three takeaways.
Evan Lockridge・Former Business Contributing Editor
October 6, 2017
“Sometimes growing stronger is also the next thing that leads to the next recession,” said Dr. Larry Davidson (pictured).Photo: Evan Lockridge
3 min to read
“Sometimes growing stronger is also the next thing that leads to the next recession,” said Dr. Larry Davidson (pictured). Photo: Evan Lockridge
Trying to narrow down the single, biggest point made at the annual FTR Transportation Conference, held in mid-September in Indianapolis, would be a fool’s errand. That’s because the 13th annual event was so content rich, covering everything from the economy and freight to equipment and everything in between.
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So what were my key takeaways? Well, I found three.
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Expect a ‘sauntering’ economy to continue
Dr. Larry Davidson, professor emeritus of business economics and public policy at Indiana University’s Kelley School of Business, was both pessimistic and optimistic.
On the downside, he said, the economy is stuck in what he called “secular stagnation.” In other words, “we are going to have to put up with growth that’s like we’ve had recently.”
While he described the pace of economic growth as “sauntering,” the good news was that he doesn’t see recession as likely. It would take an unexpected shock to push us into a recession, he said, like the financial mess that led to the Great Recession or the quadrupling of oil prices in the 1970s. So far nothing like that has happened, and he believes the U.S. has the flexibility to overcome many problems.
Hurricanes could affect GDP growth
FTR senior analyst Noel Perry said Hurricanes Harvey and Irma could shave half of a percentage point off overall economic growth in the third quarter of 2017.
Perry noted that Texas and Florida represent about 15% of the entire U.S. economy, ranking second and fourth, respectively. The two states also make up about 7% of trucking activity in a normal day and affect another 4% as important parts of truck trip circuits.
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Since analysts before the hurricane were expecting GDP growth to clock in at an annual rate of 2% in the third quarter, that could translate into just a 1.5% improvement, which is half the pace seen in the second quarter of the year.
The good news is, you can expect all of the rebuilding in the hurricane zones to add extra life to the economy in the final quarter of this year and the first quarter of 2018.
There’s a lot of uncertainty in trucking
It shouldn’t come as a surprise that electronic logging devices, autonomous trucks, and other changes in trucking are causing a lot of uncertainty among fleet executives.
Don Hinkle, vice president of equipment services at YRC Worldwide, noted his company has been surprised by the price of ELDs, calling them “expensive.”
And while it remains a mystery as to how fast the march toward completely autonomous vehicles will proceed, Venture Logistics’ President and CEO Greg Eddy said any step toward it becoming a reality is a plus for not just trucking but also the entire public, because of the safety technology involved.
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Then there’s the “Amazon Effect,” and how it’s changing the future of freight transportation.
Paul Will, senior executive consultant for Celadon Trucking Services, noted that Amazon has greatly decreased the interval between the time a customer orders a product and the time it arrives on their doorstep.
“You really think about what happens now from the standpoint of logistics and supply chain. Now you need these massive distribution centers when you are trying to get merchandise to people in just two days,” he said.
Matt Parry, senior vice president of logistics for Werner Enterprises, said the internet behemoth is forcing logistics providers to choose a niche so they can survive the future.
What does look certain after attending the event is that trucking will continue to prosper, but the challenges will be different, and in some ways far greater, than anything seen since deregulation.
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Evan Lockridge covers business and economic news for HDT, both in this monthly column and on Truckinginfo.com. A freelance writer, he has been covering the trucking industry in print, online, and on the air since 1991.
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