Fleet Management News & Business Info | Commercial Carrier Journal
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Analysts see tighter capacity making 2013 a good year, but carriers aren���t so sure. T BY AVERY VISE rying to forecast 2013 from the perspective of mid-December 2012 is dicey business. First, we have that whole thing with the Mayan calendar, but if you are reading this, we obviously dodged that bullet. Then there���s the so-called ������scal cliff��� ��� a term you are no doubt sick of hearing by now. Still, the outcome of the ���ght between Democrats and Republicans on the Bush-era tax cuts and federal spending has enormous implications for the U.S. economy. ���The big-picture economy is clouded at the moment due to the ���scal cliff,��� said Bob Costello, chief economist for the American Trucking Associations, in an interview in early December. A comprehensive deal that reduces the de���cit could set the stage for a robust recovery. Failure to make a deal at all could mean a recession. And pushing off a decision for a few months isn���t a solution. ���If we kick the can down the road, there���s no recession, but we have a cloud of uncertainty,��� Costello says. By the time you read this, everyone 28 COMMERCIAL CARRIER JOURNAL will know much more where the con���ict stands than they did the week before Christmas. To avoid analyzing three separate scenarios, let���s assume the outcome lands somewhere between ���kicking the can down the road��� and a modest deal that doesn���t dramatically change the fundamentals of the economy. But which way are the fundamentals headed? For 2013, most analysts see them as modestly positive, but carriers aren���t necessarily on board with this view. ���I���m always optimistic, but our equipment is getting older, and we are wondering how we���re going to replace it with current rates and volume of freight we are able to haul,��� says Erik Olson, president of Memphis, Tenn.-based MLG Logistics. ���As our economy continues to drag along, I feel things will remain the same,��� says Darrel Wilson, president of Strafford, Mo.-based Wil-Trans. A DECENT YEAR FOR FREIGHT? ���Absent an all-out recession, we should have continued recovery in housing and | JANUARY 2013 autos in 2013,��� Costello says. ���Those are the strengths of the U.S. economy, and they tend to be the early birds of better economic times.��� Due to pent-up consumer and business investment demand, Costello thinks the economy could be pretty robust in 2014 and 2015. While Costello���s medium-term outlook is optimistic compared to other analysts, he���s not alone in suggesting that 2013 will be a good year for the economy. ���It���s awfully hard to read at this point, because there���s so much uncertainty in the United States and the world,��� says John Larkin, managing director at Stifel Nicolaus and head of the ���rm���s transportation and logistics research group. ���But if you assume 1.5 percent to 2 percent growth in economy and freight, I think 2013 will be respectable. You will have a bit more freight and reduced capacity, especially as the hours-of-service rules kick in midyear.��� The outlook is even brighter if Washington strikes a deal on the ���scal cliff that inspires consumer and business con���dence, Larkin says. ���The economy looks better than we