Graves Not Sure If We’ve Hit Bottom Yet

By Jim Mele, editor-in-chief
Oct 7, 2008 12:19 PM

NEW ORLEANS. With Wall Street’s chaos as a backdrop, American Trucking Assns. (ATA) president & CEO Bill Graves told his members, “Things are not going well for our industry and we face some awfully tough times in the near future.”

Citing war and global unrest, record fuel prices, the economic slowdown, disappearing credit, shrinking freight tonnage, and political uncertainty, he told the major trucking companies gathered here for the group’s annual convention that “I’m not confident anyone knows if we’ve bottomed out – and if and when we do – how long it will take before anything close to an economic recovery will occur.”

During a panel discussion by three industry economists, ATA’s chief economist Bob Costello echoed Graves’ opening conference remarks, offering that “things will get worse before they get better.” While freight levels had begun to show signs of recovery in the spring, levels began deteriorating in July and the current economy “ensures freight will fall again,” he said.
Revising expectations for the fall shipping season from “muted” to “negative,” Costello added that “Until we can really assess what’s going on [with the current economic unrest], we can’t really make a forecast.”

If there is a silver lining in the downturn for the industry it’s that “capacity will be very tight when the recovery comes, whenever that will be,” Costello said. Last year, he pointed out, the overall truckload fleet declined by 2.6%, and in the first half of 2008 “it shrank another 1.3%.”
Drawing parallels to New Orleans’ recovery from Hurricane Katrina, Graves told ATA members that “there are lessons to be learned” even in the worst of times. “The key is have a plan,” he said, outlining ATA’s legislative agenda for 2009.

At the top of that agenda is reauthorization of the highway spending fund during next year’s Congressional session. ATA’s efforts will focus on three elements, Graves said – efforts by trucking to cut its carbon footprint, a new highway safety initiative and “continuing to emphasize the basic essentiality of the trucking industry.”