Overdrive Magazine

July 2019

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6 | Overdrive | July 2019 Join all our friends at facebook.com/OverdriveTrucking Follow breaking news and commentary at twitter.com/OverdriveUpdate Subscribe to our YouTube channel at youtube.com/OverdriveMag Subscribe to our daily newsletter at OverdriveOnline.com/newsletter-signup Exercise your trucking business mind at " Overdrive's Trucking Pro"group at Linkedin.com Share and comment on photography from around the trucking world at Instagram.com/overdrivetrucking Not long a er the heated freight market of 2018 cooled o , there came talk of a looming downturn. Most forecasts have balanced bad news with but- on-the-other-hand talk. For example, the National Transportation Institute, which tracks driver compensation, recently reported "the acceleration of pay moves has decreased" in 2019's rst quarter, though the increases were still deemed "substantial." And though average signing bonuses are dropping, "the number of carriers o ering bonuses continues to remain fairly high." So the fever pitch has subsided, but carriers are still trying hard to ll seats. Je Tucker, CEO of brokerage Tucker Company Worldwide, notes "there are more drivers and more trucking compa- nies than ever before, plus the number of shippers using brokers continues to increase. at so ens demand, even as volumes hold steady or gradually increase." Discerning so ening demand in other stats through May, Cass Information Systems, which monitors shipping trends, is more ominous: "More and more data is indicating that this is the beginning of an economic contraction." at's as opposed to "merely a pause" in expansion, or a "re- trenchment." e conclusion is based partly on the Cass Freight Shipments Index, which has been neg- ative year-over-year for the sixth straight month. It's o en said that trucking – particularly at- bed, with its direct tie to construction – is a key economic indicator. Data from nancial services provider ATBS reveals how the owner-operator atbed segment did in this year's rst quarter vs. a year ago. Freight rates rose enough to push their net income from 77 cents per mile in early 2018 to 79 cpm this year. Yet atbedders saw declines in miles and dollars (revenue and net income). It remains to be seen if this is a correction from a strong 2018 or, as Cass suspects, something worse. e economy at large is projected to grow through 2019 at 2.6%, then slow to 2.1% in 2020. at's according to the National Association of Business Economics' survey of 53 professional fore- casters as reported by Fortune magazine. However, Fortune reports "a majority think a recession is possible before the next presidential inauguration." Bottom line: At best, business as usual for an undetermined time. At worst, a more pronounced slowdown this year or the next. If you're among the thousands of owner-operators who secured operating authority in recent years, check your stability in terms of dedicated shippers and strong relationships with at least one broker you trust. If you're a leased operator thinking of going independent, don't wait too long and take on new risks just as opportunities start to dry up. But do take the time to build escrow savings and to complete the other necessary prep for such a major step. "If we don't do any harm to our economy, don't enter a war and don't somehow slip into recession," says Tucker, "I think there's still room to grow and good days still ahead." Slowdown: Just how slow, how far down? By Max Heine, Editorial Director mheine@randallreilly.com, twitter: @maxheine "The fl atbed segment is already showing signs of weakening due to easing in manufacturing and industrial activity," notes a June report from trucking consultant FTR.

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