A month from now, we’ll be inundated with experts reading the trucking tea leaves for 2019. Rather not wait for their pronouncements? Here’s an early jump on new-year predictions, as well as trends that go beyond 2019. The forecasting comes from speakers at last month’s MarketWaves 18 conference, put on by trucking data company FreightWaves.
- The economy has been strong in 2017 and 2018, partly due to tax cuts and deregulation pushed by President Trump, said Ibrahim Bayaan, chief economist of FreightWaves. It appears the economic rebound is in its mid- to late phase, he said, but that doesn’t necessarily “mean a recession is right around the corner.”
- Two developments could force interest rates higher: a rise in the national debt, which is likely, and further trade problems with China, said Jason Schenker of the Futurist Institute. Strong sectors for 2019 are e-commerce, industrial technology and consumer goods. Automobiles, construction, metals and mining are at the other end of the prosperity spectrum. Most of his clients are bullish on 2019’s economic performance, he said, but over 80 percent of them expect a downturn in 2020.
- Used truck prices will drop as much as 40 percent in the first quarter, “back down to 2010 levels,” said Dean Croke of Freightwaves. Even with the favorable tax law changes to depreciation providing an incentive for truck buying, the huge increase in orders of new trucks didn’t seem to be justified.
- Electricity will be a viable energy source for heavy-duty trucking, but only for short-haul in the near future, said Eric Fuller, president and CEO of U.S. Xpress. Electric-powered trucks are “not ready to go that 500 miles we really need,” but that could happen in five to 10 years, assuming the required infrastructure develops.
- Integration of autonomous trucks for long-haul will be even slower, Fuller predicted. Total autonomy, with no person in the truck, is 20 to 25 years out. “That last 5 percent of the technology is going to be the hardest to fix,” he said.
- Drivers will continue to gravitate toward smaller fleets, said Jeff Tucker, CEO of Tucker Company Worldwide. The industry has added 32 percent more driver jobs in the last six years, and with “more than a two to one ratio, those drivers are entering one-to-100 truck fleets,” he said. Of those, most are joining or starting fleets of one to six trucks. That’s driven in part by the wealth of market data from truckstop.com and other providers, Tucker said, leading to an attitude of: “I don’t want to work for them, or for them – I want to work for myself.”
- One 2019 forecast came with a firm date: March 29. That’s when a trucking spot rate futures exchange will open. It’s a partnership of FreightWaves, Nodal Exchange, which operates a futures exchange for electricity production, and DAT, whose rate tracking will underlie the pricing model. Though it sounds like something for large fleets, brokers and shippers, its officials said its value – smoothing out the volatility in spot rates for up to 16 months – could also benefit the smallest fleets.
- Data can be used to anticipate and avoid things that can thwart on-time deliveries. Echo Global Logistics Vice President Scott Friesen referred to creating “anti-events,” that is, “adding value in a way to keep those things from happening.” Sometimes it’s just one minor incident, such as a fork lift driver being sick and missing a shift, that “creates a whole cascade of events,” he said.