The recession ended a year ago, economists say, and the trough of the downturn was a year before that. Since then, hiring has improved, the stock market’s up, and manufacturing has expanded for 22 consecutive months. More importantly, the driver shortage is back on the front burner and getting hotter. With that rising demand, it’s easy to see a big green light for seeking higher pay at another carrier, adding a truck or a trailer, or getting your own authority.
Balancing all this is the stumbling economy. We’ve heard for months about a possible “double-dip” recession, a jobless recovery, and a housing market that refuses to get on the bandwagon. While manufacturing is on a hot streak, May’s growth rate was the slowest in 12 months. The stock market’s been plunging since the first of May.
Some specific events contributed to the slowdown, notes economist Noel Perry, of the trucking consulting firm FTR Associates. The tsunami in Japan disrupted auto manufacturing lines, unrest in the Middle East drove up oil prices, and housing continues to lag.
Nevertheless, “Every recovery is uneven,” said Perry, addressing the CCJ Spring Symposium 2011 in Birmingham, Ala., put on by Overdrive’s sister publication Commercial Carrier Journal. “There will be an offset to this slowdown. It will probably happen in the fall.”
Perry warned that trucking companies tend to be shy about raising prices when market conditions dictate they should go up, so they should be prepared to take advantage of a rebound that might well occur this fall. For example, it might be unwise to postpone buying equipment until there is absolutely no doubt the economy has rebounded and stabilized, by which time another recession could be just around the corner.
Owner-operators, too, should keep one eye on the road and the other on emerging opportunities. Independents could be in a sweet spot if bigger competitors don’t have the capacity to handle rising freight demand. Whether you’re independent or leased, stay current with freight and driver rates so you don’t leave money on the table.
As you weigh any possibilities for expansion or changing carriers, consider these current resources to help assess your situation:
• See Max Kvidera’s June cover story, “Adding a truck,” at OverdriveOnline.com.
• Read Dollars & Sense columnist Kevin Rutherford’s two-part series on expanding your operation. The first installment is on Page 24.
• Go online for our Aug. 15 webinar, sponsored by Freightliner Trucks. Gordon Klemp, head of the National Transportation Institute, will share detailed second-quarter compensation data from more than 350 key carriers, and the trends that will affect the industry through year-end. Register at TruckerWebinars.com.