Heavy Duty Trucking

OCT 2014

The Fleet Business Authority

Issue link: https://heavydutytrucking.epubxp.com/i/399400

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ttttt OCTOBER 2014 Trucking's Most Respected Business Report 5 key takeaways from FTR conference – Troy Clarke, President and Chief Executive Officer Navistar International Trucking's Most Respected Business Report hotline F TR's 10th annual transporta- tion conference, held in mid- September in Indianapolis, drew a record crowd of more than 300 people. Among the key trucking- related topics discussed: 1. The driver shortage is real, and it's no longer just a problem for long- haul, irregular-route carriers. Even drayage carriers are feeling the pinch, which could affect the ability of intermodal to take pressure off long- haul trucking lanes. The shortage will continue to get worse as more regulations either reduce the driving pool or cut fleet productivity. 2. This capacity crunch is driving fleets to not only increase driver pay, but also improve productivity through technology and through collabora- tion with shippers. Companies that help fleets out in areas such as driver wait time are going to be "shippers of choice" and get easier access to capac- ity at lower rates. 3. The economic situation is complicated, said FTR economist Noel Perry. If you look at the history of recovery from recession, more recent ones have been both longer and weaker, he noted. The average growth has been 2.1% in every year of this recovery, so don't expect it to be much higher than that next year. 4. Despite the sluggish GDP, economic indicators affecting freight, such as industrial production, have been strong. "In the last three recover- ies, looking at what happens to freight compared to GDP, in 1991 and 2001 freight didn't grow as fast as the economy," Perry said. "In this one it has grown faster. So the statistics say stop moaning about this recovery if you're in our business." – Deborah Lockridge, Editor in Chief Keep up with the latest news each day at www.truckinginfo.com Read the full interview at www.truckinginfo.com/Clarke GDP shows economy expanding at annual rate of 4.6% in Q2, up from previous estimates of 4.2% and 4%, and the fastest pace in two and a half years. Durable goods orders fell 18.2% in August, but excluding transportation were slightly stronger than expected. New-home sales hit annual rate of 504,000 in August, 18% above July's upwardly revised rate — the biggest one-month increase in 22 years and 33% above last year. The Leading Economic Index continued to rise in August, but at slower rate than July or June. DOT's Freight Transportation Services Index rose to 119.6, 26.5% above the April 2009 low and just 0.5% below the all-time high of 120.3 in May 2014. Leading Economic Index (The Conference Board) New home sales (U.S. Commerce Dept.) Durable goods orders (U.S. Commerce Dept.) ttttt 119.6 Q: Your third quarter financials showed a net loss of $2 million. Why is that actually good news? A: That number [a year ago] was minus $247 million, on roughly the same level of revenue. So what we really have is a $245 million year-over-year improve- ment. That's why, at least internally, we take the opportunity to recognize and celebrate break-even performance. To improve roughly a quarter billion dollars is significant. Q: Have things improved to where you can put engineers back to work on new products rather than fixing existing ones? A: We have a "Project Horizon," which is the renovation, the renewal of our entire Class 6 through 8 truck product line, with lots of innovation, lots of quality improvements, functional en- hancements, fuel economy improvements, advanced telematics — all the good stuff. It is something we're very excited about, and with the kind of performance we had in this quarter, it gives us more confidence. GDP (U.S. Commerce Dept.) Economic Indicators hotline – Troy Clarke, A Q & Green: Positive Yellow: Concern Re d: Negative Freight Transportation Index (U.S. Department of Transportation) ttttt +4.6 % ttttt -18.2 % ttttt +33 % ttttt 103.8 18 HDT • OCTOBER 2014 www.truckinginfo.com TM

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