Truckers to Benefit as Consumers Continue Recovery
Economic predictions from Donald Broughton
continued low energy prices, including falling diesel prices, and the continued challenge of a driver shortage, he pre- dicted during his speech April 30.
INDUSTRIAL-LED RECOVERY Broughton said the economy has
been in the midst of its first industrial- led recovery since 1961, but at the same time, the consumer economy, which has led previous recoveries, has been stagnant. In the previous recoveries, air freight has grown faster than trucking, and trucking has grown faster than rail. Air and trucking tend to carry more consumer goods, while rail tends to carry more heavy industrial goods. In this recovery, the opposite
has happened. Allowing for a drop in coal production, rail grew faster than truck, which grew faster than air, and truck tonnage grew faster than truck loads – all indicating that the nation’s logistics providers are carrying heavier, industrial-sized loads. But that’s changing, he said. Truck
Economist Donald Broughton from Avondale Partners discusses how the consumer economy impacts the trucking industry
By Steve Brawner Contributing Writer
The American economy is transi-
tioning from an industrial-led recovery to a consumer-led recovery, which should be good news for motor car- riers, Arkansas trucking executives
ARKANSAS TRUCKING REPORT | Issue 3 2015
were told at the ATA’s Annual Business Conference & Vendor Showcase. “The battleship of the economy is
turning course fairly dramatically,” said Donald Broughton, managing director and chief market strategist for the St. Louis-based Avondale Partners invest- ment firm. The future also includes
loads now are growing faster than truck tonnage, and air freight is grow- ing, especially in international lanes. The strong dollar is leading to cheaper imports – bad for manufacturing, but good for consumers. Change involves uncertainty and risk, he said, but because the consumer economy is much bigger than the industrial economy, and because trucks haul a lot of consumer goods, he expects motor carrier profit margins to “get better and better and better.”
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