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Today, we look at the emerging trends within the trucking industry for 2011 as we come to the close of the first quarter:
The trucking industry is important as an advance warning industry for the rest of the economy. What is happening with the performance of the trucking industry tends to act as a reliable forecast for the rest of the economy – the trucking sector is the first to experience economic downturn and the first to lead the country out of recession.
So, what are the major trends which are emerging in 2011?
We expected fuel prices to rise as this is a natural progression from increased demand for fuel as the economy picks up and consumers start spending money again. If it was simply a matter of balancing the inflationary pressure upon fuel prices against the tentative economic growth we are seeing, then the story would end here. However, events in the Middle East are casting a serious cloud over the reliability of future oil supplies and this is helping to drive fuel price increases to the $4 a gallon level (seen in California).
A Shortage of Trained Drivers
Some pundits have claimed that the trucking industry shed over 300,000 driver jobs during the recession, however with the recovery under way, 2011 is seeing a dramatic shortage of trained drivers to fill vacancies. The revised Hours of Service (HOS) rules are also compounding the situation as it is not simply a case of more work for each driver as they are restricted to how many hours they can work in any event – HOS means more drivers are needed to do the same level of work in the past.
Increasing Shipping Costs
Freight costs are increasing, and again this is due to the inflationary pressures which are associated with economic recovery. The rise in shipping costs is something to be concerned about because it is not simply due to recovery inflation, but also to the shortage of drivers which is artificially fueling demand for freight and logistics services.
NAFTA – Canada, Mexico and the US
Hilary Clinton has already held secret talks with her Canadian counterparts on revisiting the NAFTA trade treaty (North American Free Trade Association), which is sort of letting the cat out of the bag. The lion which is now being set free however is the US/Mexican cross border trucking deal which is only one part of the issue. Look forward to a deal sealing the NAFTA Superhighway; a highway route linking Mexico, the United States and Canada.
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Thank you for the information I found on your website. I go to Bethel College in McKenzie, Tennessee. I used this information for a paper in my class. Thank you again
Sue
Thanks Sue, we appreciate that!