Top Economist Shares His Outlook for the Year Ahead

Truckstop and travel plaza operators attend The NATSO Show to gain insights into the trends that will affect their business. At this year’s show, Bob Costello, senior vice president and chief economist at American Trucking Associations will share his insights during a keynote address, offering predictions on the economy, the trucking industry and the year ahead. Stop Watch sat down with Costello to get a preview of what’s to come.

 

Q:  What do you anticipate from the economy in 2016 and how will that affect the trucking industry? COSTELLO: The economy was growing at 2.5 percent or lower in the second half of 2015 as an inventory adjustment became a drag on the overall GDP figures. For 2016, GDP can accelerate some, increasing slightly more than 2.5 percent. Once we get through an inventory adjustment— i.e. too much inventory throughout the supply chain—the decent economic growth will have a positive impact on the trucking industry.

 

Q:  What indicators within the trucking industry should truckstop and travel plaza operators look at to gain insight into their markets?

COSTELLO: If NATSO members want to look to trucking data and compare that with their data, they should look at Not Seasonally Adjusted trucking data. The best numbers would be loads and miles. If NATSO members want to see the underlying trends in trucking data outside of normal seasonality, like holidays, then they should look at Seasonally Adjusted data. The best numbers would be loads and miles. If NATSO members want to see the underlying trends in trucking data outside of normal seasonality, like holidays, then they should look at Seasonally Adjusted data. Loads and miles and revenue are good ones. In terms of driver spending power, they should look at driver wages.

 

Q: What type of growth do you expect to see in alternative fuels? Do you expect that to alter demand and/or the cost of diesel fuel?

COSTELLO: With the large drop in diesel fuel prices over the last year, alternative fuel vehicles are not as attractive, especially in the over-the-road irregular route truckload industry. There are still opportunities in the dedicated truckload market where the shipper helps pay for the equipment and with private fleets.

 

Q: What are the top issues the trucking industry is facing in 2016? Can you share your predictions on what that means for your members and do you have any thoughts on what it could mean for the truckstop and travel plaza industry?

COSTELLO: It is still the driver shortage from my perspective. ATA estimates a shortage of between 35,000 and 40,000 drivers, with new drivers entering the profession slower than drivers are leaving. Driver retention and recruitment will be the difference between growing as a company or shrinking. For NATSO members, it translates into higher pay for drivers, which means they should have more money to spend at travel centers.

 

Q: What present-day challenges within your sector of the industry do you see influencing truckstop and travel plaza operators?

 COSTELLO: There is a technician shortage in the U.S. It might provide more opportunities for value-added services from NATSO members. The U.S. Bureau of Labor Statistics estimates that trucking will need to recruit 67,000 new technicians by 2022 due to growth or to replace those currently working in the industry. That figure is in addition to the more than 75,000 new diesel engine specialists BLS anticipates will be needed by 2022.



via Business Feeds

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