While business leaders and investors may count on an army of economists or other financial tea-leaf readers to help them gauge the health of our nation's economy, I bank on the American trucking industry.
Just as they say in regards to presidentiual elections "as Ohio goes, so goes the nation," (at least until Clinton took the Buckeye State in this year's primary...) I say as trucking goes, so goes the economy!
I am by no means the genius who figured that out but it has been proved time and again-- going back for me to when I first started reporting on this industry in the economic recession of 1980-81-- that trucking is the leading indicator of when the economy is about to slide into a downturn of one degree or another and also when it is about to climb back once more.
The proof, as a math whiz might say, is in the numbers. Alright then, check out this bellwether chunk of data: The American Trucking Associations‘ (ATA) is reporting that its advanced seasonally adjusted "For-Hire Truck Tonnage Index" increased 1.3% in June-- marking it second consecutive month-to-month gain (it rose 0.5% in May).
ATA says the seasonally adjusted index was 5.4% higher compared with June 2007, marking its eighth consecutive year-over-year increase. What's more, "this improvement was the largest year-over-year gain since January 2005, just surpassing the 5.3% jump in January 2008."
That's not really red ink: DOT map shows just what highway freight density looks like in tons
I don't speak much in numbers but those numbers sure sound good to me. ATA chief economist Bob Costello is more cautious as is the wont of economists-- none of whom can afford to be labeled cockeyed optimists. In my defense, though, I will point out he characterizes the June tonnage reading as "solid" and says it aligns with "several anecdotal reports from motor carriers."
Nonetheless, Costello forthrightly suggests it is a "close call" whether the economy will dip into a recession later this year or will only "significantly" slow down.
“It seems that truck tonnage is once again leading the U.S. economy,” Costello says. “During the 2000-2001 cycle, trucking pulled out of a recession before the aggregate economy fell into one. Unfortunately, truck tonnage could slow later this year as the overall economy is expected to be quite weak in the fourth quarter and the first quarter of next year.”
Costello adds that trucking capacity has "tightened significantly" as high fuel prices drive some carriers out of the market. At the same time, carriers have reduced fleet sizes. He notes some carriers have even shipped their trucks to foreign buyers in Eastern Europe and Central and South America-- and he expects these trends are "likely to continue in the near term."
I figure the economy-- which is no monolith but a living, breathing entity with literally millions of nerve endings constantly interacting and reacting-- is even as we speak re-organizing itself Medusa-like into something stronger and more flexible and thus much better configured to deal with the changes now roiling both the national and global socioeconomic fronts.
My personal bet is that this pickup in freight now being reported foreshadows a gradual return to better times for the US economy.
To go yet further out on a limb-- to where economists dare not go-- I further wager that the recovery will gain momentun once we have elected a new President this Fall. I know which one I want to see win, but the point here is that both "presumed nominees" are clearly leaders who will not shirk from the tasks at hand. Simply put, I think having either of these leaders in the Oval Office will help shift our economy back into high gear by next year.
The challenge for fleet owners will be how to manage between now and then. That will require being as well-informed as possible about all the winds of change buffeting our economy-- starting but certainly not ending with the trucking industry.
"I don't think the intelligence reports are all that hot. Some days I get more out of The New York Times."