Fleet Management News & Business Info | Commercial Carrier Journal
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32 COMMERCIAL CARRIER JOURNAL | JANUARY 2015 BETTER DAYS AHEAD B y most accounts, 2014 was a great year for the trucking in- dustry. The American Trucking Associations' Trucking Tonnage Index reached an all-time high in August and nearly beat that num- ber again in October. The economy's slow-but-steady recovery has led to more freight demand than the industry can handle, and the tight capacity environ- ment has allowed many carriers to raise freight rates as a result. And the Institute for Supply Management's New Orders Index that reflects manufacturing orders is experiencing an 18-month run of growth dating back to June 2013 and currently is trending at levels not seen in more than a decade. But 2014 wasn't without its own challenges. The hours-of-service rules that took effect in July 2013 crimped fleet productivity anywhere from 3 to 5 per- cent. Infrastructure issues and increased congestion on America's highways also took bites out of an otherwise great year. A recent study by the American Trans- portation Research Institute said trucking companies lost 141 million hours of productivity in 2013 as a result of con- gestion on the nation's Interstate system, amounting to about $9.2 billion in lost revenue and the equivalent of 51,000 truck drivers being idle for one year. While infrastructure and congestion issues were still a challenge last year and will remain so in 2015, the rollback of the HOS provisions (see page 9 for the full story) as part of the latest spending bill that halts two requirements – that a 34- hour restart must contain two consecu- tive 1-5 a.m. periods and the restart must be limited to once per week – should allow carriers to recoup some of the resulting productivity losses experienced in the last year and a half. But the driver shortage and the impact of new and forthcoming regulations both threaten to erode fleet profitability. MIXED EMOTIONS Industry analysts unanimously are bullish on their outlooks for the trucking indus- try this year. According to FTR's Trucking Conditions Index for October, "market fundamentals remain strong for carriers as we approach the end of 2014," said Jon- athan Starks, FTR's director of transpor- tation analysis. "Our expectations for the TCI are for it to remain at its current high level throughout 2015, as we continue to see a very positive market for fleets and drivers for at least the next year." FTR isn't alone in its optimism for 2015. When asked to assign a letter grade to the trucking industry's prospects this year, both Donald Broughton, managing director and senior research analyst for Avondale Partners, and Jim Meil, princi- pal of industry analysis for ACT Re- search, gave it an "A" without hesitation. Bob Costello, chief economist and senior vice president at ATA, gives it a "solid B," noting it would likely be an "A" if the economy were growing at a 3.5 percent rate rather than his forecasted 2.7 percent rate in 2015. Strong order activity for Class 8 trucks echo analysts' positive outlook. In Octo- ber, truck orders hit their second-highest With a positive outlook heading into 2015, driver availability weighs heavy on list of concerns for fleet executives B Y J E F F C R I S S E Y