Editorial: Trucking’s Slow Climb Out of Recesssion

While year-end outlooks for what the coming 12 months will bring are usually clouded by a host of “what-ifs” and “could-happens,” the outlook for 2002 is surely murkier, and darker, than most years.

Speakers at this newspaper’s annual Management Outlook Forum – who represented trucking, shippers, manufacturers and Congress – uniformly said they expected 2002 to bring only a mild recovery out of the current recession.

They wondered when the nation’s response to terrorism concerns, and all the new security measures that has brought, might give way to more normal but crucial considerations of making commerce more efficient. When, for instance, will the country return to the task of rebuilding and improving its strained infrastructure?

They fretted that looming environmental protection rules on heavy-truck engines might cause a huge distortion in the marketplace for new and used trucks, and further hurt the country’s manufacturing base.

omething as turbulent as fuel prices drew both their appreciation and concern, as panelists were thankful that prices are lower these days but worried that the price weakness signals how much the global economy has weakened. They emphasized that such weakness overseas will weigh on U.S. freight shipments.

And they predicted months or even years of adjustment ahead to high insurance costs, new rules for Mexican trucks in the United States and U.S. carriers operating there, and to security measures coming out of Congress.

The Dec. 10 forum was followed the next day by another cut in short-term U.S. interest rates by the Federal Reserve, an action that also reflected some of that cloudiness over how the future might be shaping up.

Financial markets have been signaling for weeks their optimism that an economic recovery lies just around the corner. So when the Fed this time cut interest rates only a quarter-point, instead of the half-point cuts it has usually made in 11 rate reductions this year, it also acknowledged that there were early signs of improvement. But the Fed also warned that the downside risks remain and recovery signs are only tentative, and left the door open for more rate cuts ahead unless things clearly get better soon.

On our panel, the view was that economic growth generally, and truck shipments in particular, might be on the mend sometime in 2002’s first quarter, or second quarter, or around midyear, depending on which panelist was speaking.

ut none of them expected things to get much stronger very quickly.

This story appeared in the Dec. 17 print edition of Transport Topics. Subscribe today.