I recently returned from covering FTR’s annual Transportation Conference in Indianapolis, Ind., one of my favorite events of the year to attend and cover.
What draws me to the event is the quality of the speakers, the breadth of topics covered, and the deep dives into freight and overall market conditions that affect the trucking business, including north of the border.
You can visit TruckNews.com for full coverage of the event but here are some key takeaways:
Don’t call it a freight recession!
This may be the longest, most challenging downturn in recent history, but it isn’t a freight recession. FTR chairman Eric Starks noted while freight demand has been stagnant, it hasn’t been in freefall, or even steady decline.
Instead, he opted to call it a rate recession. Trucking rates have been hammered — not due to falling freight demand but rather excess capacity that has been slow to exit the market. Even so, analysts indicated it will take both improving freight volumes and a continued decrease in capacity to bring joy back to the market. The slowing reduction in capacity won’t be enough on its own.
Supply chain remains vulnerable
The industry has recovered from the supply chain-related challenges and parts shortages seen post-Covid, but that doesn’t mean supply chain issues are gone for good. We got a reminder of this in recent months when a Mekra Lang mirror factory in Mexico – which supplies the vast majority of the mirrors that go on North American trucks – burnt to the ground.
There has been very little coverage of this factory fire. FTR equipment analyst Dan Moyer said the company initially could find confirmation only through a Spanish language local newspaper. However, factory shipments came to a halt and about 10,000 Class 8 trucks were “red-tagged”, or parked in a state of incompletion unable to be delivered until the flow of new truck mirrors was resumed.
Moyer said factory shipments began ramping back up in July, and about 2,500 of those red tag units have since been delivered. But it serves as a reminder that unforeseen threats to the supply chain are an ongoing concern.
Nearshoring brings risks, too
Trucking will benefit from the continuing trend of nearshoring, which has seen more production of truck parts and components brought to North America, primarily Mexico. But nearshoring also brings risks.
The Chinese are looking to enter the North American market with vehicles of their own, and Mexico is their potential gateway. David Carson, senior vice-president of sales and marketing with Daimler Truck North America, said some Chinese truck makers have already begun distributing in Mexico, with absolutely no dealer network or aftersale support in place to back those low-cost vehicles.
“We know that Chinese products in the U.S. and/or Canadian markets would have pretty significant consequences and threats to what we have in the industry today,” he said.
Election apprehension
No one wants to talk about the looming U.S. election, at least not on stage, or on the record. The more colorful of those discussions were reserved for the lobby bar. But when the topic did come up, most admitted that regardless of outcome, greater stability and certainty will be welcomed.
The two candidates hold vastly different views on issues such as emissions regulations, international trade deals and tariffs on the import of foreign goods, all of which will affect the trucking industry.
Truckers are resilient
And perhaps the greatest takeaway of all was that the trucking industry is resilient. No one was predicting a quick turnaround in the industry’s fortunes. ‘We need to focus on what we can control, not what we can’t,’ was a frequently echoed sentiment heard at the conference.
Smart fleets are buckling down, turning their attention inward on how they can reduce costs and become better operators, so they’re well positioned to take advantage of the recovery when it does arrive.
Most continue to invest in technology and people, and to get closer to their customers so those relationships are strong when freight demand picks back up.
‘There’s no crying in baseball,’ goes the famous line from the movie A League of Their Own. Well, there’s no crying in trucking, either. When times get tough, the resiliency of this industry shines through. There weren’t any tears shed at the FTR Conference, but instead a deep recognition that the market will improve and times like these are a good opportunity to get well positioned for the recovery.
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