Truck News


US trucking on cusp of a capacity shortage?

ORLANDO, Fla -- US trucking is "on the cusp" of a capacity crunch, according to American Trucking Associations vice president and chief economist Bob Costello.

ORLANDO, Fla — US trucking is “on the cusp” of a capacity crunch, according to American Trucking Associations vice president and chief economist Bob Costello.

Costello told the popular All Eyes on the Economy panel that eventually demand for freight services will outstrip the slowly growing supply of trucks and drivers and lead to a capacity crunch that will drive freight rates upwards.

“We just need to wait till late next year or 2015. We need two or three straight quarters of 3% GDP growth,” Costello said.

Costello noted that US truckload capacity is down 5.7% compared to the end of  2007 while less-than-truckload capacity is down 15%. The devaluation of the US dollar is also creating opportunities in export markets such as Nigeria and Mexico for used trucks, many with more than 800,000 miles on the odometer. That in itself is removing 1.5% of capacity per year, according to Kenneth Vieth, president of ACT Research and a fellow All Eyes on the Economy panelist.

“We are not that far off equilibrium. Capacity is going to get sucked up and things are going to get tight,” Costello stressed.

Vieth provided another statistic that supported Costello’s belief in a capacity crunch: Despite GDP being up 20% from 2003 to 2013, the US tractor population today is comparable to 2003. And the average age of a Class 8 truck is up to 9.8 years, compared with 8.9 back in 2003.

But the final panelist Mark Vitner, placed some cool water on those projections with his forecast of only 2.4% GDP growth for the US economy next year and 2.7% in 2015.

“If the economy is only growing around 2% and you add capacity, that’s a mistake that is going to be hard to grow out of,” Vitner warned.

Costello said there was an alternative route to a capacity crunch: Fleets hanging on to old trucks may go out of business.

Costello was particularly optimistic about the industry’s longer term fortunes. He said population growth alone over the next decade will result in 25% more freight that will need to be hauled.

Truck News

Truck News

Truck News is Canada's leading trucking newspaper - news and information for trucking companies, owner/operators, truck drivers and logistics professionals working in the Canadian trucking industry.
All posts by

Print this page
Related Articles

Have your say:

Your email address will not be published. Required fields are marked *