Fleet Management News & Business Info | Commercial Carrier Journal
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2014 ECONOMIC OUTLOOK FEELING THE SQUEEZE Trucking industry growth limited by regulatory impact, lack of drivers BY JEFF CRISSEY L ooking at the various metrics and indexes surrounding the transportation industry, there is plenty of reason for optimism as we embark on a new year. Inflation is still a ways off, interest rates remain low – at least by historical standards – while the industrial production and manufacturing sectors show signs of continued growth and the automobile and housing markets continue to climb steadily out of the recession. The sentiment of fleet executives reflects these positive trends. According to the November 2013 Randall-Reilly MarketPulse survey of for-hire fleet executives, more than half (51.6 percent) expect business conditions to be "better" or "much better" in the next six months, compared to only 3.1 percent that said conditions will worsen. However, there still are plenty of challenges facing carriers that are impeding – or halting altogether – their ability to grow. Based on the CCJ 2014 Economic Outlook survey of for-hire fleet executives (213 respondents), here is a look at the top four challenges respondents to the survey said they will face this year: 4. POLITICAL CLIMATE IN WASHINGTON (7.5%) The bipartisan rancor in Washington hit a low point in October when the government shut down over funding for the Affordable Care Act. The deal that ul28 COMMERCIAL CARRIER JOURNAL timately got the government back up and running only lasted until Jan. 15. It appears that the nation has been spared the threat of another shutdown with the passage of a budget deal in both houses of Congress that includes a spending plan for the next two years. That's great news for trucking fleet executives, as well as small business owners across the country, whose confidence was stymied during the 16-day shutdown in October. But another potential crisis – the debt ceiling debate – still looms on the horizon. Feb. 7 is the date on which the deal struck by Republicans and Democrats to suspend the debt ceiling is set to expire. Whether both sides take up arms again or decide to call a cease-fire has yet to be determined, but the uncertainty and rhetoric leading up to the deadline certainly will make business owners looking to invest and expand more reluctant to do so – at least in the near term. "[Washington leaders] haven't been negotiating in good faith," said Eric Starks, president of FTR, during his presentation at the 2013 CCJ Fall Symposium in Scottsdale, Ariz., in December. "It absolutely creates additional uncertainty. From a business perspective, all they want to know is if they can work within the framework to plant something in the stone and go from here." | JANUARY 2014 3. REGULATION (11.7%) It certainly isn't a surprise that carrier worries over regulation makes the topfour list of concerns heading into 2014. The impact of the new hours-of-service rule that took effect in July already has yielded a 3 to 5 percent reduction in productivity by some estimates. Throw on top of that other recent regulations and rulemakings – including the Compliance Safety Accountability program – and carriers already are dragging productivity losses with them into this year. New regulations on the horizon include speed limiters, a drug and alcohol clearinghouse for commercial driver's license holders and escalating greenhouse gas emissions/fuel economy standards. "Shippers want to see the savings, but you'll be paying on the front end," says Starks regarding GHG and fuel