CCJ | Changing Economy will Strip Truck Freight

09.20.17 | James Jaillet, CCJ

Long-term freight challenges loom for the trucking industry as the economy and the supply chain become more efficient, more digitized and, thus, less reliant on transport needs, said Noȅl Perry, a chief economist for FTR and

Perry, who gave a trucking economic outlook Wednesday at the annual FTR Conference in Indianapolis, said freight movement continues to drop as a share of the country’s overall economy (as measured by GDP). “The economy constantly finds ways to economize on transportation,” he says. “It’s falling and it continues to fall. And in the 2020s it’s going to fall at an even greater rate.”

Short-term, Perry forecasts the industry to grow in its own right, its share of GDP aside. Perry expects growth of 5 percent this year over last year, 3 percent in 2018 and another 2 percent in 2019.

Long-term, the picture becomes more dire. Perry sees a “substantial reduction in international movement of finished goods,” over the next decade and a half as low-cost labor in places like China and Mexico is increasingly replaced by automation. This shift in global manufacturing will cut into truck freight in the U.S., he says. Some of that freight will be replaced with domestically produced goods, but it won’t make up for the losses, he says. Currently, about 30 percent of U.S. truck freight stems from imports.

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