A looming driver shortage, rate increases and equipment dislocations are the main challenges that cargo interests will encounter over the next two years as the U.S. economic recovery continues, transportation experts told a Journal of Commerce Webcast Tuesday.
The U.S. economy will continue to expand at a moderate pace with some downside risk associated with debt problems at home and in the European Union, said Mario Moreno, Journal of Commerce economist.
U.S. gross domestic product should expand 2 percent in 2013, with containerized imports increasing about 2.4 percent. If that growth is achieved, the total import volume of 17.8 million 20-foot container units will be the highest since 2007, he said.
China will remain the largest source of containerized imports, although its share of the U.S. market in key products such as furniture, footwear and apparel is edging down year by year, Moreno said. China’s exports to the U.S. are growing more slowly as wages there increase compared to other exporting nations such as Vietnam, Indonesia, Mexico and countries in Central America.
The U.S. economic recovery has been under way for about 12 quarters. The average for other recoveries since 1970 has been 17 quarters, with the longest one lasting 20 quarters, so the current recovery should continue for another year or two, said Noel Perry, economist at Transport Fundamentals LLC.
While the popular thinking is that truck rates will be stable for the next two years, Perry sees external factors exerting upward pressure on the price of transportation. Chief among these pressures is the possibility of a serious driver shortage.
The driver population was depleted during the economic recession of 2008-09. Conservative investments by motor carriers, and driver lifestyle issues such as spending many days away from home, are keeping a lid on the driver population.
Despite continued high unemployment overall in the U.S., trucking is not attracting a young pool of drivers. New drivers earn about $45,000 to $50,000 a year. Studies indicate starting pay of $70,000 to $80,000 would be needed to attract sufficient drivers. The industry over the next few years could have a shortage of some 800,000 drivers, Perry said.
The National Retail Federation projects that consumer spending will continue to expand in 2013 at a moderate pace of about 3.4 percent. Online spending will grow must faster, from a smaller base, at 9 to 12 percent, said Jonathan Gold, vice president of supply chain and customs policy.
Cargo interests are apprehensive about equipment pricing and availability as ocean carriers continue to move forward with their plans to cease providing chassis to the trade. Their exit from the chassis business is spreading from inland locations and smaller ports to major seaports. It is incumbent upon other equipment providers such as chassis lessors, pools and truckers to quickly fill the void, Gold said.