• You Are Here: Home > News
  • > ATA Economist: Trucking Outlook Strong, yet Potholes Lie Ahead
ATA Economist: Trucking Outlook Strong, yet Potholes Lie Ahead

Freight demand and increased freight rates are boosting the U.S. trucking industry, but the dissolution of NAFTA could wipe that all out, notes ATA’s chief economist Bob Costello.

Speaking at NATSO Connect, Costello said the U.S. economy as a whole is “accelerating,” with “no reason” it won’t continue growing in 2019, reports Fleet Owner.

“I’ve been hearing consistently from motor carriers that this is the best January they’ve ever seen” in terms of freight demand, Costello noted. “This has already been the third longest economic expansion in U.S. history and by spring it will be the second longest. Usually by this point [in an economic expansion] we’re starting to slow down. Instead we have the opposite happening.”

Additionally, tax reform plus any spending that may result from the infrastructure funding bill now being discussed is providing further “shots in the arm” in to the U.S. economy in terms of spurring growth.

Yet, the acute driver shortage affecting the industry could keep a lid of growth.

“The three biggest problems for trucking can be summed up this way: drivers, drivers, drivers,” Costello said. He did add, however, the industry is adjusting to the capacity crunch in the form of higher driver pay.

“When you have a shortage of anything, the price goes up. And we’re seeing driver pay go up. A lot of the rate increase motor carriers are getting are going to driver pay.”

Meanwhile, the threat from President Trump the U.S. could withdraw from the North American Free Trade Agreement (NAFTA) looms large. While it should be taken seriously, Costello didn’t think that scenario will play out, saying the threat could be a “negotiating” tactic.

“I’m slightly optimistic that this [a pull out] is being floated as a negotiating tactic,” he said. “With the Mexican presidential election in July and our mid-term [Congressional] elections in November, the odds of making a deal by this point are long.”

If Trump were to truly initiate a NAFTA pull out, that would occur in late March/early April and would activate a six-month clock for dissolution of the trade deal.

“It might be a ploy to get a deal done within that six months, but that would be a really big gamble. And suffice to say this is a really big deal for trucking: cross-border truck-traffic generates $6.5 billion a year for U.S. truckers. [That trade] is critical to the trucking industry.”

Full Fleet Owner story here.

Share This Story