John Larkin covered lots of trends, trucking and otherwise, this week at the annual meeting of the Truckload Carriers Association in Las Vegas. As managing director and head of transportation capital markets research for Stifel, Nicolaus and Co., he’s got a good vantage point on forces affecting the industry.
Here are some points he made, plus my take on how they could have some bearing on owner-operators, especially independents:
- The anemic post-recession recovery isn’t expected to get stronger any time soon, so don’t get too smug over any stability you might be enjoying. If you don’t have an edge in your operation, keep an eye open for better opportunities.
- Robot installation has picked up and is predicted to grow 9 percent per year until at least 2025. There could be opportunities in industrial sectors that continue to automate.
- Commodities prices have fallen nearly 50 percent over the last few years due to oversupply and low demand. If you’re still hanging on in the oil and gas sector or hauling other commodities, keep a close eye on what market forecasts are saying about your niche.
- Hauling flatbed to serve construction markets? For residential, it’s a mixed bag. Young adults are shying away from marriage and childbearing, and consequently homebuying. Plus, potential homebuyers’ price-to-income ratios exceed historical averages in many big cities. On the flip side, young adults have to live somewhere: “The amount of rental housing going up is mind-boggling,” Larkin said.
- The ratio of dependents to working individuals is growing, putting a strain on welfare programs, including Social Security. “The moral of the story is to take retirement planning into your own hands,” he said. If you’re among the many owner-operators who’ve done little to no retirement savings, do what you can to remedy that.
- Consumer confidence has been static or eroding since last year, and consumer spending is down. If you’re part of the retail supply chain, keep on eye on trends in the freight you haul or the chains you haul for.
- While brick-and-mortar retail is stagnant, e-commerce is growing 15 percent a year. Alignment with the supply chain of an online seller, such as Amazon, or a traditional retailer who’s aggressively moving into online sales, such as Walmart, could be a smart move.
- Many of those online shoppers are those living in urban areas, some of whom are increasingly moving away from car ownership. “Fifty percent of the U.S. population lives in 145 counties,” Larkin said. “Folks will work and play all in the same neighborhood.” Long-term, this could mean a weakening in the automotive market and its supply chain.