Amid all of the economic gloom and doom, one bright spot for the trucking industry is record low driver turnover – 65 percent for large truckload fleets and 58 percent for small truckload fleets, American Trucking Associations Chief Economist Bob Costello said Tuesday, Jan. 27, at the NATSO Show 2009 in Nashville, Tenn.
When the economy begins to turn next year, Costello said it will be good for the survivors. “Truck capacity will tighten fairly quickly once a recovery commences, but until then it will be difficult for fleets,” Costello said.
Otherwise, economists painted a bleak picture for this year. Wachovia Managing Director and Senior Economist Mark Vitner said that while he forecasts an end to the recession by yearend, he says the end won’t necessarily be “a very good time. It means things are not getting any worse – things have just stopped falling.”
Costello echoed those sentiments. “Unfortunately, we are dealing with very bad freight volumes,” he said. December freight numbers were down 11 percent, which is the third-worst percentage of all time and the worst for a single month without the influences of a labor strike.
Since its peak in 2006, for-hire freight volumes have fallen 16.2 percent, and Costello said it’s not over. June through December for-hire loads show decreases in all trucking sectors, with tanker and flatbed sectors taking the worst hits at about 20 percent declines each. Dry van was down more than 15 percent, and reefer posted less than a 5 percent decrease. Costello said the reefer segment has been more stable because consumers still have to buy perishable goods like food and medicine.
Costello reported failures of fleets with five trucks or more slowed in December, largely due to fleets capitalizing on the collection of fuel surcharges in the midst of falling fuel prices. But that was only a short reprieve, said Costello, who expects fleet failures to increase in the coming months.
As for how much the proposed $850 billion stimulus package proposed by the Obama administration will help the economy, both economists were blunt in their assessments. “I feel like the recession doesn’t need the stimulus package for the recession to end,” Vitner said. “It won’t kick in until the end of the year. It’s basically political cover for the Obama administration so they can work on fixing the real fundamentals of the problem like the banking system.”
