Fleet Management News & Business Info | Commercial Carrier Journal
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2014 ECONOMIC OUTLOOK economy requirements. "Those benefits won't be for free. You have to do cost-benefit analysis and convey to your customers why they aren't seeing the benefit in the next five to 10 years." But one of the most immediate concerns to industry stakeholders is the electronic logging device mandate. As of this writing, the Federal Motor Carrier Safety Administration's supplemental notice of proposed rulemaking on ELDs hasn't been published. When it is, the rule could impact productivity significantly, as the mandate will require 100 percent implementation in the next few years. Fleets that were early adopters of ELDs have recovered the lost utilization, as they've learned to better manage driver hours and truck productivity, and many fleets actually have surpassed the But freight pricing was relatively break-even point on a revenue-per-truck basis after the flat in 2013, and FTR projects that capacity will remain only at modest initial adoption hurdles. "Certainly the first year of levels through the first half of 2014 ELD adoption is a real chaland freight demand will increase only lenge," says Donald Broughton, slightly over the next several months. managing director of economic Bob Costello, chief economist and vice president for the American Trucking analyst group Avondale Partners. Associations, says revenues for the entire "In the long run, it could be good truckload industry aren't as strong as for not only safety performance but loads now, which gives him the biggest for productivity as well." concern heading in 2014. "If I look at all As for fleets that haven't adopted types of truckload freight, year-to-date ELDs yet, "They are not only behind the it is up 0.8 percent," he says. "In October curve, but when it is mandated, they'll it was up 3 percent on a year-over-year be behind the 8-ball," Broughton says. basis. However, if I look at revenue for the "Those that have already adopted them entire year, it's off 1.4 percent, primarily baby-stepped their way into it. When it's mandated, fleets [implementing ELDs for excluding fuel surcharges." The reason revenues are down? the first time] may not be able to crawl "Average revenue per mile was flat last before they walk. You may just have a year after growing 3 percent [in 2012]," drop-dead date, and the negative effects Costello says. on productivity may be much more While truck tonnage figures were catastrophic." robust in 2013, load growth has been Mounting regulations have a stagnant. The last three months of 2013 two-fold impact on capacity, as showed steady increases in tonnage across they are becoming a bigger barrier almost every sector of the freight environto entry because of costs and are driving marginal trucking compa- ment, including truck, barge, international air, container, rail and intermodal. nies out of business altogether. "In general, the winners are large Trucking jobs (in millions) fleets, and the losers are small- to medium-sized 1,400 Payroll employment (in thousands of jobs) for truck transportation fleets because the ability to manage this is going to be very difficult, costly and time-consuming," says Starks. 2. FREIGHT PRICING (13.6%) Freight pricing boils down to basic supply-demand economics. The more freight – or conversely, the fewer trucks to move freight – the more carriers can charge their customers. 1,350 1,300 2011 2012 2013 Source: Bureau of Labor Statistics COMMERCIAL CARRIER JOURNAL | JANUARY 2014 29