Truck freight still
looking for bottom
Apr 23, 2009 12:57 PM, By Jim Mele, editor-in-chief, Fleet Owner
PRINCETON, NJ. While conditions will eventually turn around for the trucking industry, the growth experienced by for-hire carriers in 2005 and 2006 "may never come again," according to John White, president of U.S. Xpress Inc. Delivering an industry outlook to the 2009 ALK Technology Summit being held here, he called current economic conditions "a broad-based recession" and "the worst in the postwar era." Freight tonnage has dropped 13.4% from its peak in 2007, "and personally I don't think we've seen the bottom yet," he said.
As a leading economic indicator, trucking began to experience "a freefall in 2007," White said, which soon translated into "the largest drop in real GDP since 1991" and the loss of 4.5-million jobs since the beginning of 2008. U.S. households have lost $8 trillion in net worth over that period, resulting in a $400 billion – or nearly 4% -- drop in consumer spending, he told the summit.
Looking at trucking, the for-hire portion of the industry lost 79,600 jobs in 2008, and another 45,000 were axed in just the first quarter of this year, White said. After 3,000 trucking companies failed in 2008, that rate slowed to just 375 failures in the first quarter on 2009, largely due to sharply falling fuel prices, he said. "But I expect bankruptcies to pick up again now that fuel prices have stabilized," he added.
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