Editorial: 2001 Looks Rosy to TT Panelists

If the four experts who participated in Transport Topics’ 2001 Management Outlook Forum have it right, next year could be a pretty good time for most segments of the trucking industry.

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Panelists predicted a soft landing for the economy along with moderate growth, lower fuel prices and interest rates and increased investor confidence in trucking stocks that should lead to higher per-share prices.

The participants also delivered some sobering news, predicting that trucking bankruptcies and industry consolidation will continue despite the improving economic climate.

The panel’s rosier predictions were given a boost just hours after the annual session, when Fed Chairman Alan Greenspan indicated that inflation is probably under control and the board’s next moves might be to lower interest rates to spur economic growth. Greenspan’s statement sent stocks sharply higher, at least for one day.

Also soon after the panel met last week, crude oil fell to its lowest price level in more than four months — $28.25 a barrel — signaling that fuel costs could be headed lower.

Wall Street analyst Edward M. Wolfe of Bear, Stearns & Co. predicted that not only would the stock prices of less-than-truckload carriers continue to rise, but that truckload carriers, which have seen their stocks languish for some time, would rebound in the coming year. He expects many trucking stocks to outperform the market next year, with large regional LTL carriers doing especially well.

Barry W. Butzow, senior vice president of C.H. Robinson Worldwide, said increased shipper demand for speedy shipments is powering growth in regional LTL and TL markets.

But for every silver lining there is a dark cloud. Butzow and David R. Goodson, president of Class 8 Solutions, predicted that truck freight rates would be flat next year. And Goodson warned that falling fuel prices may not relieve the money crunch for many carriers, since shippers are likely to demand immediate surcharge rollbacks as fuel prices dip. He also said fuel prices could fall below levels that trigger surcharges but still remain above the target levels truckers used when setting their original rates.

Jim Bramlett, president of freightPro.com, warned that 2001 could well see a shakeout of online services in the trucking industry, fueled by tight capital markets and investor demands for profitability.

All in all, 2001 may not see a Space Odyssey worth remembering, but the times could hardly grow more interesting.