FTR: Recovery 'Normal,' Trucking Even Better
This slow economic recovery is not as unusual as many people think, and trucking continues to outperform it, said trucking economy expert Noel Perry Thursday - and there are signs it will continue to do so, including signs we may be nearing the end of the housing slump

Early signs of a modest housing recovery are one reason for trucking optimism, says FTR's Perry.
This slow economic recovery is not as unusual as many people think, and trucking continues to outperform it, said trucking economy expert Noel Perry Thursday - and there are signs it will continue to do so, including signs we may be nearing the end of the housing slump.
In FTR's "State of Freight" webinar, Perry, who is a senior consultant to the transportation research company, as well as principal of his own firm, Transport Fundamentals, showed a slide showing that while recovery from the most recent recession is historically one of the slower ones, it tracks almost exactly with the recovery from the 2001 downturn.
"Recoveries have gotten slower over time," he said. "What this says is the behavior of the economy this time is actually pretty predictable. It also says we're not having a weak recovery, we're having a normal one. If the last recovery was good for you, this one should be the same. This is not doom and gloom at all."
Perry says the forecast for U.S. GDP is expected to grow between 2.5% and 3% next year.
Of course, he said, there are some downside risks, including a likely recession in Europe, a stagnating global economy, China's real estate bubble, and longer-term, the U.S. debt.
Another graph illustrated one way this recovery IS different from past ones: truckload growth and industrial production growth are growing more rapidly than gross domestic product.
"So even though the economy is sort of slow from a GDP standpoint, from a transportation perspective, it's not. This has been a pretty good time for transportation, and these facts show it pretty clearly."
More good news, Perry said, is that we are beginning to see signs of a modest housing recovery. Data from the Calculated Risk blog shows the inventory of existing homes is now back down to below 3 million units, which is the level it was at in 2005, "so king of in a normal range."
When there's a large surplus of existing homes, people aren't going to build new homes, with all their attendant truckloads of building materials and big-ticket consumer durable goods to put in them. This data, Perry said, suggested we may be close to consuming that surplus, and people may start building again.
In fact, partly because of that, Perry is optimistic about the outlook for flatbed carriers.
Overall, Perry said, expect moderate growth in the U.S. truckload business next year, in the 2% to 4% range.
Trucking will face a driver shortage next year, Perry said, the worst of which will likely hit in late 2012 as more government regulations on drivers start taking effect.
That, of course, will affect pricing, and Perry says there is growing evidence that truckers are getting a big bolder when it comes to rate increases. When you take into account fuel surcharges, he said, he's expecting 7% to 9% increases next year for truckload, while LTL may be up in the double digits by the end of the year.
But don't just expect rate increases to fall in your lap, Perry said, capacity crunch or no. When asked how fleets can take advantage of these rate increases, Perry said, "You take advantage of pricing opportunities by organizing to do so. You have to change your culture and put in a price increase plan," which involves training the sales force. "A lot of fleets don't do so, and end up falling behind."
More Fleet Management

Import Cargo’s Early Peak Season is Winding Down
There was an early start to peak season this year at the nation's gateway ports, as retailers brought in merchandise ahead of tariff changes in late July and responded to other supply chain uncertainties,
Read More →
Fewer Cargo Thefts, Bigger Losses: Criminals Target Higher-Value Loads
CargoNet says organized theft rings are stealing fewer shipments but choosing more valuable freight, including metals and technology, resulting in record losses.
Read More →
How Innovative Trucking Leaders Turn Change Into an Advantage
As the pace of change accelerates in trucking, the fleets that adapt best have more than the latest technology. They have cultures that embrace improvement.
Read More →
Freight Broker Bonds Just Got Harder to Get. Here's What That Means for Your Fleet.
When it gets harder for a freight broker to prove they are financially sound, the ones who cannot clear that bar get pushed out of the market. And those are exactly the brokers who used to leave motor carriers holding the bag.
Read More →
Long-Awaited Canadian Border Bridge to Open in Detroit
For trucking, the bridge opening should offer immediate improvements in efficiency and reliability, with new customs facilities, expanded inspection capacity, and direct freeway-to-freeway connections.
Read More →
Aurora Rolls Out Next Generation of Driverless Trucks for Commercial Freight
Aurora's latest autonomous trucks it's rolling out with International feature lower-cost hardware designed for a million miles as the company expands commercial driverless freight operations across the U.S. Sun Belt.
Read More →
Freight Tonnage Down, Rates up, as Lower Capacity Powers Trucking Recovery
The recovery from the freight recession continues to be driven by reduction in capacity rather than by increased demand.
Read More →
Think Your Trucking Fleet Isn't Using Much AI? Think Again
Shadow AI — the use of unauthorized artificial intelligence tools at work — is becoming increasingly common, putting sensitive company data at risk. Learn how trucking fleets can protect sensitive data while embracing AI.
Read More →
ArcBest Consolidates Brands, Cuts Workforce
The company will bring three business units under the ArcBest brand, eliminate about 2% of positions, and expects the changes to generate $40 million in annual savings.
Read More →
Trucking Fleets Faced Record Operating Costs During Third Year of Freight Recession
ATRI's annual operational cost report shows carriers trimmed fleets, delayed equipment purchases, and ran older trucks as expenses continued to outpace freight rates.
Read More →
