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FTR: NAFTA Among Factors Making 2019 Freight Market ‘Murky’

While the North American Freight market will remain strong for the rest of 2018, uncertainty in domestic and global areas could make the outlook for 2019 murky, says FTR chairman and CEO Eric Starks.

Chief among them is the increasing likelihood the Trump administration will scrap and attempt to redesign the current North American Free Trade Agreement (NAFTA), Starks said during a business symposium at a Volvo Trucks event.

“I am getting more and more concerned that NAFTA will get blown up and they will try to rebuild it,” Starks said. “I think the administration is closer to blowing up NAFTA, and that gives me heartburn. This is something that creates an uncertainty heading into 2019.”

As reported by Fleet Owner, Starks stressed that even though the market and general economic health are looking good right now, there could be a potential for regression depending on a variety of other issues, including NAFTA. He pointed out the potential for a trade war with China regarding aluminum and steel tariffs, as well as President Trump pulling the U.S. out of the Iran Deal, which could have an impact on crude and oil prices.

Currently the U.S. industry is seeing freight levels that are up at 25% year over year, and it has not slowed yet. Job growth remains strong, but added that there are industry-wide inventory problems that are creating repercussions through the transportation supply chain. He also pointed out diesel prices have spiked above the $3-per-gallon mark.

The April 1 full enforcement of ELDs is having some effect, Starks said.

“This actually had more than an impact in what we had previously seen,” he said. “This tells us there is additional capacity pulled out of the system because of this.”

“We are basically at 100% utilization,” Starks stressed. That means anyone who has a truck and a driver is moving freight, he explained. “This is unprecedented, and we do not see it easing back until the end of the year,” he added.

Full article here.

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