The near-term outlook for the trucking industry is not good and the longer term outlook may be worse. The better months are behind us, not ahead. If you have been a marginial producer in the last year or two, or if you have not increased your net worth in the same period, serious consideration should be given to getting out of expediting.
Excerpts from "The Trucker" magazine, October 15-31, 2007 edition:
Headline: "Weak U.S. economy 'harder' on trucking; downturn forecast to linger through 2008."
"...A number of reports in late September point to an American economy that could pose problems for trucking well into next year - if not longer....
"...reduced demand for freight movements have already affected railroads and air cargo to some extent, and hurt trucking companies more substantially.
"'A weaker U.S. economy has hit the trucking sector harder than other transportation segments. It started n the fourth-quarter 2006 and has continued unabated, causing reduced tonage volumes, increasing costs, and to a lesser degree, pricing pressure' the (Standard & Poor's report) says. 'Both truckload (TL) and less-than-truckload (LTL) companies have been hit, and expected further softening in (economic) growth indicates that a turnaround is unlikely before the second quarter of 2008 at the earlies.'
The article quotes Noel Perry, Schneider National's director for market research. He calls it a "freight recession" and says, "it doesn't take much (economic) slowdown to throw trucking into a freight recession.'"
"In short, it takes quite an upturn in the He said it takes quite an upturn in the modern economy to bring freight levels up. He sets the threshold at 3 percent growth in GDP - and economists predict that threshold won't be reached until the fourth quarter of 2008."
The economic slowdown is not predicted. It is not opinion. It is happening right now and it is fact. The economic indicators say so. It effects are showing up in the trucking industry.
The difference between a slowdown and a recession is a matter of degree. In a slowdown, the economy contunues to grow, but at a slower rate. In a recession, the economy moves backwards (negative growth). GDP does not advance from prior levels, it declines.
A slowdown is hard on the trucking industry. A recession is worse.
History shows that expediting is not immune from the effects of a slowing economy or a recession. If your history is one of a marginal producer, the times are not going to get better any time soon and the economy is not your friend. If you are thinking of getting out of the business, now might be a good time. The pain of getting out now will be less than the pain of getting out later.
The preceeding opinion is presented by Phil "Rose-Colored Glasses" Madsen.
Excerpts from "The Trucker" magazine, October 15-31, 2007 edition:
Headline: "Weak U.S. economy 'harder' on trucking; downturn forecast to linger through 2008."
"...A number of reports in late September point to an American economy that could pose problems for trucking well into next year - if not longer....
"...reduced demand for freight movements have already affected railroads and air cargo to some extent, and hurt trucking companies more substantially.
"'A weaker U.S. economy has hit the trucking sector harder than other transportation segments. It started n the fourth-quarter 2006 and has continued unabated, causing reduced tonage volumes, increasing costs, and to a lesser degree, pricing pressure' the (Standard & Poor's report) says. 'Both truckload (TL) and less-than-truckload (LTL) companies have been hit, and expected further softening in (economic) growth indicates that a turnaround is unlikely before the second quarter of 2008 at the earlies.'
The article quotes Noel Perry, Schneider National's director for market research. He calls it a "freight recession" and says, "it doesn't take much (economic) slowdown to throw trucking into a freight recession.'"
"In short, it takes quite an upturn in the He said it takes quite an upturn in the modern economy to bring freight levels up. He sets the threshold at 3 percent growth in GDP - and economists predict that threshold won't be reached until the fourth quarter of 2008."
The economic slowdown is not predicted. It is not opinion. It is happening right now and it is fact. The economic indicators say so. It effects are showing up in the trucking industry.
The difference between a slowdown and a recession is a matter of degree. In a slowdown, the economy contunues to grow, but at a slower rate. In a recession, the economy moves backwards (negative growth). GDP does not advance from prior levels, it declines.
A slowdown is hard on the trucking industry. A recession is worse.
History shows that expediting is not immune from the effects of a slowing economy or a recession. If your history is one of a marginal producer, the times are not going to get better any time soon and the economy is not your friend. If you are thinking of getting out of the business, now might be a good time. The pain of getting out now will be less than the pain of getting out later.
The preceeding opinion is presented by Phil "Rose-Colored Glasses" Madsen.
