In The News
Expedited Trucking 2017 Forecast
What are the key trends to watch in expedited trucking in 2017? What direction is the expedite market heading--will it grow, hold steady, or hit economic headwinds?
We asked three industry experts to peer into their crystal ball and share what they see for 2017. Here are the highlights.
On 2017 Market Outlook ...
"I think 2017 will prove to be a very robust year for the expedite industry," predicts John Elliott, chief executive officer for Load One LLC, an expedited trucking carrier headquartered in Taylor, Mich. "I think that in the second quarter we will see a strong uptick in freight. The big part is the U.S. economic forecast and the supply-demand equation. While those things are relatively in balance right now, the strengthening economic recovery will tip those scales toward higher demand."
Stu Sutton, former president of Sylectus and now CEO of Full Circle TMS, a Toronto-based transportation management software firm, also sees growth for 2017. "The first half of 2016 was not good," says Sutton. "When I was talking with carriers in January, many of them were saying they were well above last January. Sometimes ten or twenty points above last January in terms of volume. A lot of people in the industry I have spoken with have a very positive feeling about 2017. Some of that's fueled by the new administration. There's a sense that this is going to be a more business-focused administration that's going to give businesses more opportunities."
David Swartz, partner at Premium Transportation Group, a full-service logistics provider based in Toledo, Ohio, sees an uptick for 2017 beginning some time in the second or third quarter, pointing to key economic indicators in the manufacturing and construction sectors that impact demand for expedited freight.
"What I am reading in the 'tea leaves' is that domestic auto production for the big three--Ford, GM and Chrysler--is going to remain consistent relative to 2016. And I think the other automakers (with U.S. production)--like Toyota, Nissan and Honda--are going to ramp up their activity a little bit," Swartz predicts. "I also think that electronics and construction materials are going to continue with steady growth."
On Impact of New Administration ...
Swartz says that growth in the construction sector will be driven by the Trump administration's commitment to upgrade the nation's transportation infrastructure. "I think the construction market is definitely going to increase," says Swartz. "Whether it be long-haul trucking or short-haul with expedite, you're going to see increased demand to deliver construction materials to jobsites so they can get those projects done faster."
Sutton thinks that the renegotiation of NAFTA (North American Free Trade Agreement) by the Trump Administration could impact the expedite industry. "I think there could be some really interesting things happen this year that could bring a lot of freight back into North America--or keep it in North America--which would put more freight volumes on the existing carriers," says Sutton.
Elliott is also optimistic: "I think the current administration's views on regulations and job creation will benefit the American industrial machine which is the largest consumer of the expedited freight spend."
On Impact of the ELD Mandate ...
The biggest game-changer this year will be the full implementation of electronic logging devices (ELDs), predicts Elliott. "While some of the larger expedite carriers have already implemented the technology, many have yet to do so. But this transition will not be painless. Trucking companies must not only equip their fleets but also prepare and train their drivers and their sales and operational staffs. The full implementation of ELDs will remove about five to seven percent capacity from the market, while many industry experts peg the number even higher."
Sutton says that the implementation of ELDs may result in a tighter supply of drivers. "The sense is that drivers won't be able to be as flexible with their logbooks when everything is done automatically on the ELD," says Sutton. "The concern is that regulators can come in and review the ELD data and issue fines and penalties after the fact, even though there may be justification for somebody to run, say, ten minutes over to finish the job. That may not play well with some of the drivers who are going to just say, 'Hey, I'm out of here. I've had enough of this. I don't need to have these things where I might get penalized for something where I'm just trying to do my job.'"