Hang in There!

So, how's business? A real easy question to answer for most trucking operations. Lousy! Sure, the economy will rebound, and you're going to want to be there when it does, so survival needs to be your current goal. There seems to be some light at the end of the tunnel. However, the tunnel might

Peter Toja is president at Economic Planning Associates, a consulting firm with a long history in the trucking industry. In a presentation at this year's Truck Trailer Manufacturers Association convention, he pointed out a number of positive factors affecting the trucking industry. Included in them are:

* Aggressive rate cuts by the Federal Reserve

* Suppliers' inventory draw-downs are close to complete

* As a result manufacturing activities will revive

* Import and export trade continues to expand

* NAFTA economies are growing

* A high level of construction activity continues.

At the end of 1999 and early in 2000, manufacturers failed to respond to a decrease in incoming orders of manufactured goods. As a result, inventories going into the end of 2000 and early 2001 were excessively high. These inventories are now at controllable levels, so manufacturing is expected to increase by about four percent. This will increase traffic flow for both finished products and for raw materials--obviously, a good sign for the trucking industry.

It has, in fact, been enough for Paccar to announce that Peterbilt is increasing production of Class 8 trucks by eight percent and Class 6 and 7 trucks by a significant 22 percent. Through a company representative, Nick Panza, Peterbilt's general manager, said that the company was pleased with the orders that came in June and that he sees demand improving among small for-hire fleets and private carriers--markets in which Peterbilt has always done well.

Another bright spot in our economy has been the construction market, and if Toja is correct in his forecast, will continue to be. He says, "Lower interest rates will begin to positively impact a number of construction sectors, especially the mandated highway and street programs. We will see some strong spending later this year and also next year. We also think the lower interest rates will support the residential sector. The only areas that will be off will be commercial and industrial programs."

Peterbilt's Panza agrees. Last May he said, "Housing starts have been stable and are expected to remain so as interest rates decline. Construction is a key indicator in determining freight projections and hence a key indicator in our sales forecasts."

Mack Trucks' newly appointed president and CEO, Paul Vikner also agrees. With a 28 percent share of the nation's relatively strong construction and vocational truck market, Mack, according to Vikner, is faring far better than most of its competitors this year. So much so, in fact, that Vikner is predicting that by the end of the year Mack will easily better its market share for all heavy-duty truck sales for the ninth consecutive year. In particular, he's counting on the company's newly introduced Granite Series to help Mack increase its vocational market share to more than 30 percent. He says, "No one is going to take that part of the business away from us. We've been on top for more than 35 years now, and that is a position in which we have a tremendous amount of pride. It's as much a part of our heritage as the Mack bulldog."

So hang in there! While the tunnel may still be uncomfortably long and the light at its end not too bright, it's there. Really!