Happy New Year 2011
Welcome to 2011 and a New Year's edition of T2T :)
The holiday season is finally winding down at last, and if you're like me, it comes as a relief to get the holidays behind me and start the new year fresh and ready to get stuck in.
What does 2011 have in store for us?
The big story for 2011 has got to be the economy.
Expect the economy to make a firm recovery in 2011 and this is going to mean increasing demand for trucking and logistical services. Trucking growth will be focused upon major manufacturing and import/export and national logistical hubs such as Houston, Chicago, San Diego and Baltimore. The news from the Christmas sales season is positive with the US consumer returning to the stores and freely spending money again. This is the key driver for economic revival - not tax cuts, not international trade treaties, not stimulus spending - all these may play their part to one degree or another, but until the US consumer is out and buying in volumes the economy will stay stuck.
The holiday season sales numbers demonstrate that US consumers are spending at pre-recession levels again. In order to snatch those hard earned consumer dollars, manufacturers and distributors have been gearing up in the latter half of 2010, though job creation has been lagging behind and will continue to do so into at least middle of 2011. The increasing economic reality will lead to greater demand for trucking services and the effect on the industry is obvious from the increasing recruiting activity of the big carriers offering driver training contracts for rookie entrants.
Oil prices will rise
Average gas prices for 2010 are over $3 which is above the federal government's expectations for this crucial economic indicator and are set to rise further in 2011. High gas prices are not necessarily bad news, though it does feed directly into higher operating costs for truckers. The positive aspect of rising gas prices is that it demonstrates economic revival - as economic activity picks up we should expect increasing demand for gas, and therefore a rise in oil price is to be expected. The fact that there is increased economic activity means more work and higher pricing for trucking operations.
Pricing Trucks for Sale
The cost of trucking equipment has been depressed through the initial period of 2010 but has shown signs of some revival, though very delicate. Operators have been deferring buying new equipment to ease cash flow and extract additional return on investment (ROI) out of existing resources. The used truck and trailer market is at a crucial point as it shifts from a buyer's market to a seller's - increasing demand for logistical services is going to be good news for everyone selling new or used equipment as the money starts flowing around the system once more. Expect the price of trucks for sale to rise in 2011.