BLOOMINGTON, Ind. — Current US trucking market conditions could be the calm before next year’s storm, which could see capacity either drastically decreased by an onslaught of productivity-choking new safety regulations or increased due to recession.
That’s the message from industry forecaster FTR, which says a major shift in capacity availability could occur as the result of two powerful forces that could swing capacity utilization 10 percentage points in either direction.
After this year, FTR reports, the industry will face an “unprecedented range of outcomes” over the next few years. Chief among them are the arrival of an onslaught of new regulations that could drastically reduce capacity, or a recession that could add to it.
”A swing of just 5% is enough to dramatically impact pricing in the marketplace,” said Noel Perry, senior transportation economist at FTR. “A swing of 10% – that would be a disruptive event, for both transport executives and supply chain professionals. There will be companies with their heads stuck in the sand; you don’t want to be one of those companies.”
FTR acknowledges the chances of a recession are increasing, due to bad economic news elsewhere in the world and a recovery that is “clearly getting old.”
However, the arrival of new safety regulations could push capacity utilization to 100%, giving carriers some welcomed pricing power and putting supply chain professionals in the hot seat.
FTR plans to examine all the likely scenarios for the coming years at its annual Transportation Conference Sept. 15-17 in Indianapolis, Ind. For more information, visit www.FTRConference.com.