With the growth of U.S. gross domestic product hovering at the 3 percent mark, trucking can expect to see little improvement in freight volume for 2014, says FTR Senior Consultant Noël Perry. And while his forecast for the industry is “mildly optimistic,” Perry says any bump in the overall economy, combined with truck capacity that’s been running at near 98 percent, could be the “tipping point” that drives utilization above 102 percent and creates a capacity crisis to rival 2004.
However, Perry cautions that he’s expected an economic upturn and the “regulatory drag” on driver availability and productivity to have had much more significant impact on capacity for two years now – and so he’s “conservatively” predicting rate improvement in the range of 4 percent this year. The upside, however, is double that.
Similarly, Perry puts the odds of better than expected GDP growth versus lower growth at 2 to 1 – although that “downside exposure” will be an increasing concern in 2015 and 2016.
“The real exposure in in 2014 is, what if we all have a much better year?“ Perry says. “This is the year to stay flexible.”
For truckload, he sees tank truck volumes to continue to grow with the oil and gas development while flatbed will have another good year. And though dry van pricing was weak in 2013, Perry say the segment is “ripe for recovery,” and “where the action is” in 2014.
Additionally, trucking will benefit from continued steady fuel prices, and freight should get a bump in early spring as shippers play “catch up” following the delays caused by poor weather in the eastern half of the U.S. in January and February.
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