When this year started, industry observers felt the most critical issue facing the industry would be how well the economy held up throughout the year. With the manufacturing sector shrinking, consumers were expected to carry the economic load. Most economists predicted the economy might slow into negative growth for a quarter or so this year, but there was cautious optimism regarding the coming year.
How things have changed. The economy? It’s in a recession, pushed along by the events of Sept. 11. Consumers closed their wallets in the face of new, unknowable threats. But the economy is no longer our No. 1 concern. Instead, we’re worried about anthrax, a war in Afghanistan and the possibility of more terrorist attacks. The world has changed since Sept. 11.
For trucking, nervous consumers mean a dwindling freight market. When people stop buying, inventories build up and retailers stop ordering goods from manufacturers. As manufacturers cut back on production, there are fewer finished goods to ship out and less raw material to ship in: Trucking suffers. When trucking suffers, so do truck and component makers.
Truck manufacturers had a very tough 2001, as North American Class 8 truck sales in the first three quarters of this year fell by more than 37 percent compared to the same period last year. After nine months in 2000, truck makers had sold 170,057 Class 8 trucks, according to the American Automobile Manufacturers Association. This year, sales for the first nine months totaled only 106,433, AAMA said. Predictions for the full year are for about 175,000 units sold. Rainer Schmueckle, president and CEO of Freightliner, said his company anticipated a 2001 Class 8 market of 172,000 units. He noted that was just more than half of the high point of 309,000 Class 8 trucks sold in 1999. As for the outlook, Schmueckle said he saw “no immediate signs of recovery in the near future” for truck makers.
Others supplying the industry agreed. John Rice, head of North American commercial tire operations for Michelin, said his company sees a recovery farther out than other estimates. “We’re a little more pessimistic than some,” Rice said. “We don’t expect to see things pick up until 2003.”
Some economists don’t expect the slowdown to last that long, but with the current climate there are still too many unknowns for credible predictions.
Even if the economy does begin to pick up sooner rather than later, the terrorist attacks of Sept. 11 have resulted in permanent changes for the industry. While these changes are understandable, they are still unsettling. The last thing truckers want is more scrutiny from the feds. But if you haul hazardous materials, more scrutiny is just what you are going to get.
An anti-terrorism bill rushed through Congress in the weeks following the attacks contains a provision that requires full background checks for all drivers seeking a new hazmat endorsement or renewing an existing endorsement.
Hazmat haulers were singled out for extra scrutiny when federal authorities said future terrorist attacks might involve trucks carrying hazardous materials. The Federal Motor Carrier Safety Administration began a massive review of hazmat carriers and CDL holders with hazmat endorsements. According to a FMCSA spokesman, the agency will visit all hazmat carriers and review the CDL applications of hazmat drivers. Anything suspicious will be reported to the Federal Bureau of Investigation for further action. Federal and state inspectors have also been asked to step up hazmat driver ID checks during routine inspections at weigh stations and ports of entry.
Other bills introduced since Sept. 11 include more provisions related directly to trucking, including one that calls for inspection of all trucks crossing the U.S. border with Mexico and Canada. At this writing it remains uncertain whether that or another bill will ultimately pass.
This year will be remembered most for what happened Sept. 11. It will be remembered as a year when things changed, not only for our nation but also for our industry.