It’s that time of season when we reflect on the past year, look forward to the coming year, and if you have a business, start to make a list of those issues that cause concern or relief. When it comes to the trucking and truck leasing industry in general, there are three factors that I’d consider the most influential: taxation, regulation, and security.
Taxation and regulation, though burdensome, are issues we’re used to dealing with and can plan our business accordingly. However, as we are still getting used to the awful news and visions from San Bernardino and Paris, terrorism is one of those issues that we can’t necessarily account for and an issue that can cause real chaos.
That being said, I’m a pretty optimistic person. If you ask me how I’d view the economy over the last three years, I’d have to say adequate —not all bad and not a home run. Barring an unforeseen catastrophe, I’d envision continued average growth for the economy. And slow and steady, though not exciting, is on the right trajectory.
As far as the industry goes, the news has been mostly positive:
- Freight is expected to increase and that’s good for all concerned. The one drawback is the shortage of drivers and technicians. That certainly is only exacerbated by the problematic regulations like HOS, and the aging out of existing drivers and techs. All of us in the industry need to work together to find ways to communicate to a new generation the excellent career path they can follow as drivers or techs. I’m hopeful that the new technology will draw younger people to the trade.
- The passage of the highway bill is a positive move away from crippling polarization. It’s always good to see people work across the aisle to come to an agreement that benefits so many people and businesses. I certainly hope that continues and that people in power come to realize the effects that over-taxation and over-regulation can have on business, especially when it comes to productivity. How the ACA will affect businesses is yet to be fully determines. However, one thing we know is that having to comply with regulations often means adding staff, and this can cut into a company’s profitability.
- The increase in vehicle technology has made and will continue to make cars and trucks safer. And that’s good for everybody who travels the road. The route to making trucks cleaner is succeeding but there’s been a pretty substantial cost. That’s because OEMs were forced to produce these cleaner engines before they mastered the technology. For the past three or four years, we experienced big increases in breakdowns of these newer trucks and that led to an increased spend for repairs and maintenance and big losses due to downtime and disruption. However, it now seems as though OEMs have weeded out a lot of the glitches so we’re seeing less problems. Again, I envision a slow and steady move in the right direction.
- The growth in dedicated contract carriage has been impressive. As smaller companies find they can’t keep up with new technology and regulations, they’re turning more and more to professionals to take over that burden for them. Instead of hiring their own experts and developing their own expertise, they can focus on their core business and let the pros worry about transportation and improving the logistical supply chain.
On a slightly down note, there have been articles talking about a drop in Class 8 truck orders, but I think a lot of that can be attributed to the fact that we may be at the end of the turnover for aging fleets. Remember, during the recession, many businesses didn’t want to make the investment in new assets. But eventually, new trucks need to be purchased and that may be what we’ve been seeing over the last couple of years. I think we’ll see a leveling off and things will get back to normal.
On a personal note, we’ve been really fortunate here at ASL. Our growth has been steady, even during the recession and we’ve just had our best month ever. I attribute that, to a great deal, on the wonderful staff we have. There are people that have been here for 20 years, and we’ve experienced very little turnover. I’m thankful for their dedication and hard work.
About the Author: Jim Donnelly is the president of All Services Leasing Inc., a NationaLease member. This blog was original posted on blog.nationalease.com/whats-the-view-of-2016-optimistic.