Freight volumes continue to be varied, depending on the sector. Trucking’s outlook will be cloudy in the months ahead, according to American Trucking Associations chief economist Bob Costello.
“As far as freight volumes, the trucking economy pretty mixed right now,” Costello said during the “All Eyes on the Economy” panel during the annual Management Conference and Exhibition. “Some groups, like tank truck and flatbed, are doing very well, while conversely you have other areas like dry van that are underperforming.”
Despite the fact that volumes overall are going up, capacity “remains relatively in balance to demand,” Costello said.
“However, if the overall economy were to surprise us on the upside – with, say 3% GDP growth for several straight quarters, we would not have enough trucks to handle the corresponding increase in freight,” he said. “This speaks to the continued threat of our current quantitative driver shortage of 20,000 to 30,000 drivers potentially getting worse in the future.”
Costello said that while better than expected growth would be a surprise, generally the risk of recession or slower growth was more likely.
“The biggest risk to trucking would be a backslide into recession either because of the collapse of the Euro, or more likely, uncertainty related to the ‘fiscal cliff’ at the end of the year,” he said. “It is very likely that Washington simply punts on resolving the issues surrounding the cliff into 2013, thus limiting GDP growth to less than 2% until late in the year.”
Another area of concern for Costello was the “sharp deceleration in manufacturing orders which will limit manufacturing output and thus put a damper on truck volumes in the coming months.”
Costello spoke alongside Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors, and Gregory Daco, senior economist at IHS Global Insight.