I was in Washington, DC last week for an economic summit where there were over a dozen economists from all the major sectors of the US economy such as automotive, housing, foreign trade, oil, and trucking to name a few. Each person gave details specific to his or her area of expertise and the meeting took an entire day.
What I heard was that 2019 is a better year than 2018 for the US economy, tariffs do not hold back the economy as much as demand for products do, we have a labor short-age in the US, specific to Fortune, there are more truckloads of freight in 2019 than in 2018, businesses that have the top forecasting are doing the best, and in general, while our economy has been slower this past 4 months, the last 2 months’ trends have been up-ward.
What I found most interesting was that if you shut off the news media and read the numbers, a few things make much more sense. There are 8,000 oil wells that are drilled and capped by US oil companies, we have the largest oil reserves of modern times just waiting for the right time to be used – maybe that it’s a higher price, maybe that time is a decrease in production, but none the less without world-wide panic or terrorism, the US has become a huge oil exported of refined petroleum products. Even the bombing of the Saudi Arabia refinery only effected the price of oil $4 a barrel, just a couple years ago that impact would have been $10 a barrel when OPEC controlled the world oil supply.
I had an extreme honor to the next day listen to Ray Martinez the head of the FMCSA (the agency that covers log books, roadside inspections, etc.) and later that evening have a beer with him and discuss the chances of a new logging rule to allow split sleeper berth (such as 8/2 or 7/3 hours in sleeper birth instead of 10 hours straight). Mr. Martinez is a smart common-sense type guy (extremely hard to find in Washington, DC) who is an advocate for truck and transportation safety. He also talked about his visit to Fort Leonard
Wood military base and talking to young military personnel about future job opportunities in trucking.
Also while I was there I had the opportunity to talk to a couple other trucking executives about freight. The “spot market” freight business is in the tank, too much competition for too few loads, this has caused spot market rates to tank and rates to go down 50% from last year. Fortunately, when our planning is good, we secure enough contract loads so we are not effected as much as some companies. Look around the trucking industry you will hear of some relatively large com-panies going out of business – most often the cause is lack of a profitable business plan and failure to properly plan.
2019 and 2020 look really good for truck transportation, so we need to plan well, execute properly, and move for-ward,
Have fun, be safe, DonO