Wednesday, April 9, 2014

The Trucking Market is Feeling Good - Will the Economy Follow?

As I entered the exhibit hall at the Mid-America Truck Show last week, I could almost hear the Truck Market singing:

I never seen such a beautiful day
Looked like everything is coming my way
Feel like a bird just leaving a cage
Looks like my luck is
Getting ready to change

Oh yeah, welcome to the show indeed.  After suffering through the Great Recession and the “not so great” recovery, the industry has shown some very positive signs lately and these were all evident in Louisville.

You could see it:

-          The hall started to fill up fast and by afternoon the place was jammed with people.  When you have to be careful to walk around people “inside” the vendors’ booths, you know things are rocking.

-          Companies featured newer, flashier, displays (marketing budgets are back!)

-          Vendor space was full, there were even a couple trailer manufacturers in the far West Wing.  There were some foreign manufacturers with displays, relying on interpreters to make their sales pitches.

You could feel it:

-          There was a “buzz” about the place, an aura of excitement when you walked through the doors.  The truck market was back and people were giddy.

-          Everybody was smiling again.  The handshakes were strong and plentiful. Nothing like an increase in business to lift people’s spirits.

-          It was loud.  You had to stand close to people and talk louder.  This added to the very positive atmosphere.

You could smell it – and what you smelled was money!:

-          There was business being conducted, there were real deals being discussed.

-          New products were in abundance, because companies now anticipate increased sales. Competition is back baby! Because there is something to compete for.

-          One manufacturer beamed that they were building a new plant after having to close two older ones when the bad times hit.

The sun just came out
From behind a cloud
Now I feel like shouting out loud
Hallelujah, let the sun shine in
I'm feeling alright again

And it’s no mystery why the mood is so good.  Truck OEM’s are increasing production due to strong orders and trailer OEM’s are following suit to a lesser degree.  Of course this is putting pressure on suppliers to keep pace.  This is “good” pressure however, that we haven’t seen in several years.

This good mood is also contagious.  One of the reasons for the recent increase in orders is “buyer confidence”.  Just as increased consumer confidence precedes retail sales, increased buyer confidence in our industry leads to truck and trailer orders.  We don’t measure this at FTR (Freight Transportation Research), but it is apparent that fleets are more confident of steady freight growth and increased business than they have been in a long time.  People in this industry talk a lot and small and medium sized fleets often take their cue from what the large fleets do.

I wore out nine pairs of shoes
Walking this old floor
Never sang nothing but the blues
Now I'm singing me a brand new song
Standing in a new pair of shoes

The better news is that because the trucking industry is a leading indicator of the general economy, the increase in business activity and the positive business mood should be prevalent in other industries by the end of the year.  If that is the case, the economy could be experiencing a real recovery before too long. Yes, it sure feel good, feeling good again!

Sure feels good feeling good again
Sure feels good feeling good
Feels good again

(Sure Feels Good lyrics – Elvin Bishop)

(This post first appeared on the FTR website.  FTR is the leader in analyzing and forecasting the commercial transportation industry.  For more information on FTR reports and services, please click here.)