Fleetowner 2152 Kenworth Treadway Sm
Fleetowner 2152 Kenworth Treadway Sm
Fleetowner 2152 Kenworth Treadway Sm
Fleetowner 2152 Kenworth Treadway Sm
Fleetowner 2152 Kenworth Treadway Sm

Dealing with the challenges

April 20, 2009
WASHINGTON. In the words of the chairman of the American Truck Dealers (ATD), the economic picture before the trucking industry is perfectly clear – and it ain't pretty
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WASHINGTON. In the words of the chairman of the American Truck Dealers (ATD), the economic picture before the trucking industry is perfectly clear – and it ain't pretty. Yet truck dealers need to recognize there are opportunities to be had in this downturn.

"We are bombarded daily with sobering statistics on gross domestic product, foreclosures, money supply, freight capacity, layoffs, and so on," said Kyle Treadway, president of Kenworth Sales Co. of West Valley City, UT, in his keynote speech at the group's 2009 Convention & Exposition here in the nation's capital.

"But at the risk of sounding naïve, I suggest a 'glass half full' view of life," he stressed. "The primary reason we're in this dilemma is the crisis of confidence that has paralyzed the global community. The degree of optimism that consumers feel about the state of the economy and their personal financial situation determines their spending activity. And that, in turn, serves as one of the key indicators for the overall shape of the economy."

Statistics such as 127,000 trucks idled in the past 12 months alongside downsizing by truck dealers of over 106,000 employees since December 2007 don't exactly create rose-colored view of the industry, Treadway said.

The decidedly negative outlook also creates a true Catch 22 of sorts when it comes to economic activity: does the courage to spend come first, or is it the good news that inspires spending? "Either way, strengthening consumer confidence requires a collective shift in attitude to burst what Sterling Jenson of Wells Capital Management calls the 'Bubble of Pessimism' formed by the public, the market and the media," Treadway noted.

Today's trucking industry survivors are the good operators, he added, but the question they must answer is this: are they ready for the next phase? "Leading economists warn us that several months of challenge remain ahead," he pointed out. "Bankruptcy filings are less than half their peak set in 2005, but we've all seen some large companies fold, merge and downsize. Each of you will likely see long time customers, competitors, and suppliers announce plans to join these ranks."

However, that somber picture should be balanced against the recent projections by the American Trucking Assns. (ATA) that the national freight pool should grow 26% over the next 11 years. "ATA's chief economist Bob Costello predicts that trucking will increase its share of that pool to almost 71%," said Treadway. "His boss Bill Graves – the former governor of Kansas and ATA's president – sees a strong and vital long- term future for the industry. Graves predicts, 'When the recovery begins, trucks will help lead the way.'

"We need to stay close to our customers, close to our suppliers, even close to our competitors, to keep a pulse on the market," added Treadway. "I'm a firm believer that in times of adversity, our true character reveals itself."

About the Author

Sean Kilcarr | Editor in Chief

Sean reports and comments on trends affecting the many different strata of the trucking industry -- light and medium duty fleets up through over-the-road truckload, less-than-truckload, and private fleet operations Also be sure to visit Sean's blog Trucks at Work where he offers analysis on a variety of different topics inside the trucking industry.

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