No double-dip for freight market rollercoaster: FTR

NASHVILLE, Ind. — The North American freight economy has been very slow to recover, but it’s not an indication of a double-dip recession, says FTR Associates’ Noel Perry.

In a webinar entitled The State of Freight, FTR managing director Perry, says the slow pace of the recovery "may be painful," but it’s normal.

While the economy and freight could grow slower than the analysts’ forecast, this doesn’t mean the economy is heading for another slip after recent gains in 2010.

All indications show the economy is still improving. Consumption is increasing and manufacturing levels are steadily rising.

However, China remains a wildcard. It’s growth has fallen and if it slips below 5 percent, it could have serious implications for the U.S., and by extension North America in general.

As well, the trucking industry still has about 200,000 trucks parked against the fence, keeping a lid of any extensive growth over the next year, says Perry.

But as the industry continues to shed capacity, the ability to hire new drivers will be a bigger concern in the coming years.

Tough new rules like hours of service changes, EOBRs and CSA 2010 will shrink the driving pool and diminish hiring capacity even more.

It will take years to build up that hiring capacity in certain sectors, says Perry.

Intermodal has been on the rise as of late, but Larry Gross, senior consultant for FTR, thinks this will taper off somewhat — from 10 percent in the third quarter to 7 percent growth at year’s end.

However, intermodal’s share of the freight market is increasing. It currently has about 14 percent of the total freight market, even though it accounts for only 4 percent of dry van traffic.

"Its ability to affect overall truck demand is very limited," says Gross. 

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