While this recession has been the longest and deepest we've seen in a while, the record shows that markets do recover after a bad recession, said Noel Perry, senior consultant at FTR Associates, during a webinar Friday morning.


Perry offered listeners some good news -- in the first year after a recession, there's usually about 5 percent growth. This trend means we could be headed for a very good upside, if things play out according to a normal, cyclical recovery.

FTR Associates presented its Freight Outlook during last week's webinar, during which Perry said we could be headed for some positive growth in the short term. In 2011, volume levels could see major growth, and capacity levels could get back to equilibrium, if the recovery trend continues.

Modest Growth

However, the forecasters had somewhat modest predictions for 2010 and beyond. GDP is expected to grow about 4.5 percent in the first half of next year, followed by a slight decline in growth in the second half, Perry said.

Perry indicated that freight has not been recovering at the same rate as GDP, as people are slow to rebuild their inventories. However, freight will grow later in the recovery, as a fall in the dollar helps exports, and as industrial production grows more rapidly.

Capacity should get back to normal levels by June 2011, Perry said. Meanwhile, rates will start to see a recovery in the first half of 2010, but they won't return to the operating margins of 2004-2005 until 2012, he added.

More Good News

According to Larry Gross, senior consultant at FTR, intermodal, rail and ocean freight are not expected to take a sustainable amount of share from trucking. He said rail has not demonstrated any ability to capture share from truck, and its share is declining slightly. In addition, while intermodal has made some leeway into the truck market, it has not captured enough to move the overall needle, Gross said. With the case of ocean freight, this sector is limited in its reach, as you can only get to certain places via water.