In 2011, we expect the economy to continue its gradual and somewhat erratic recovery. The same headwinds that slowed the upturn in 2010 — uncertainty about taxes and regulation, high unemployment and an unstable housing market — will continue to affect the pace of an improved business environment in 2011.
Driver availability and pay rates will, in the short-term, remain a concern for the industry. The ability of our industry to support increased freight traffic will be hindered by a shrinking available pool of qualified professional truck drivers, which can also impact compensation costs. The cost of new equipment, along with concerns about availability of credit and use of capital, will also continue to impact business.
Companies struggling to survive during the recession put off fleet investments, resulting in pent-up replacement demand that has driven up pricing in the used vehicle market. Faced with aging fleets and more stringent emissions regulations, companies will be forced to invest in equipment that is more costly, in large part because of new engine technologies needed to meet lower emissions requirements.
These increased costs are ultimately passed along to consumers, affecting spending that is necessary to stimulate the economy. However, these factors present opportunities for transportation and logistics providers that may see increased interest among companies to outsource their more complex and costly transportation and supply chain operations.