During a session titled, The Future of Trucking: Quantifying an Unknown Future, FTR Truck & Transportation Expert\u00a0No\u00ebl Perry outlined\u00a0four \u201cexogenous\u201d or outside \u201cexposures\u201d facing the U.S. freight economy.<\/p>\n
\u201cIn some cases, great opportunities, and in some cases really nasty things that people don\u2019t want to talk about,\u201d Perry said. \u201cThese could all throw a monkey wrench in the works. Some are positive, some are negative\u2014but they\u2019re all real. The only issue is we can\u2019t quite figure out the timing. You need to be ready.\u201d<\/p>\n
As reported by Fleet Owner<\/em> magazine, Perry mapped out his forecast for the U.S.:<\/p>\n Recession<\/strong><\/p>\n The recovery from the 2007-2009 Great Recession is \u201cgetting stale,\u201d Perry explains. He charted the recovery periods following eight previous downturns, the current recovery has already outlasted four of those. The longest, following the 1991 recession, lasted eight years. That means that, even if the ongoing recovery makes it that long, the U.S. is due for another economic struggle by 2019.<\/p>\n \u201cRegardless of what\u2019s going on the world, it would be historically unprecedented for us not to have a recession in the next three years,\u201d Perry said, explaining that truck freight typically crashes in a recession.<\/p>\n \u201cYou need to have that in your three-year plan,\u201d he said. \u201cIf you\u2019re putting in capital now, you have to understand that somewhere out there, in the three or four years, there\u2019s going to be a year or two when you\u2019re not going to get any returns on that capital.\u201d<\/p>\n .. and that\u2019s not the worst of what can happen:<\/p>\n Depression<\/strong><\/p>\n Global sovereign debt continues to grow. The financial crisis in Greece (and to a lesser extent Japan) is just an early sign of problems to be faced by borrower countries around the world, including North America.<\/p>\n \u201cAt some point, that bill is going to come due\u2014and we don\u2019t want to face it,\u201d Perry said. \u201cAnd that\u2019s only going to make it worse. The result is something called a \u2018depression.\u2019<\/p>\n \u201cAt some point we\u2019re going to have put up with the same problem because we have this borrowing jag that we can\u2019t get off of,\u201d he said. \u201cIt\u2019s unlikely we will vote to solve the problem beforehand, because it means pain.\u201d<\/p>\n Perry figures a depression could be expected in the 2020s. He also noted that depressions do end and are typically followed by dramatic economic recoveries.<\/p>\n \u201cThe recovery becomes strong because, when you have a depression, you clean out the crap that caused the problem in the first place,\u201d Perry said.<\/p>\n Regulatory drag<\/strong><\/p>\n The impact of the DOT\u2019s regulatory agenda on capacity utilization will be unprecedented by 2019, Perry explained.<\/p>\n Essentially, at the peak, the industry will not be able to find the additional drivers it needs to keep up with additional capacity required to overcome the inefficiencies brought on by new regulations.<\/p>\n The caveat is the demand side of the equation. A recession would likely mean that utilization will remain below the level of a capacity crunch. But any improvement in the economy would elevate that crunch to \u201cthe mother of all capacity crises\u201d at well above 100% utilization.<\/p>\n Productivity revolution<\/strong><\/p>\n Looking beyond the capacity crisis and toward 2030, however, Perry points to the digital tools now being developed to more efficiently manage the supply chain and the range of trucking\u2019s operational costs: risk, fuel, drivers, and productivity. All in, these could add up to savings of more than $1 per mile\u2014of half of the current costs.<\/p>\n He pointed to the way ride sharing technology has turned the taxi market upside down\u2014and no one saw it coming. But he had an even bolder prediction.<\/p>\n \u201cI\u2019ll be very direct: In 15 years trucks will be automated,\u201d Perry said. \u201cAutomation will lead a revolution as important to the economy\u2014and to the industry\u2014as the invention of the super-highway in the early 1950s,\u201d Perry said. \u201cIf you think this is \u2018pie in the sky\u2019 stuff, just look in the newspaper and all of the talk about automating cars. It\u2019s already in the marketplace. Remarkable.\u201d<\/p>\n