TBO.com - TBO is Tampa Bay Online

Gift Cards To Keep Truckers Rolling

ADVERTISEMENT

By TED JACKOVICS, The Tampa Tribune

Published: October 23, 2007

ORLANDO - Despite projections of the slowest annual growth of retail holiday sales since 2002, the U.S. trucking industry, which hauls nearly every item that Santa Claus does not, expects to benefit this year as consumers continue to give more gift cards.

That means an increasing amount of merchandise will continue to move off of store shelves in January instead of November or December, balancing a demand for trucks that formerly peaked in October and declined in November after holiday goods were delivered, an economist for the American Trucking Associations said Monday.

Because the trucking industry's prospects go hand-in-hand with the nation's economy, any bit of good news is welcome for trucking companies whose fortunes have tumbled in the past year.

One example: Trucking has lost about half of its business to ship construction supplies during the past year largely because of the housing slump, panelists at the ATA's 2007 Management Conference & Exhibition said on the second day of their four-day session. The trade group represents large U.S. trucking companies.

The trucking industry, which relies on sophisticated economic analyses to fine-tune financing needs while optimizing fuel, employment and equipment plans, foresees some bright spots before 2010. That's when the housing slump, which has been particularly unkind to Florida and California, is expected to rebound.

Prospects such as gains in manufacturing productivity and the change in the Christmas holiday shopping dynamic are expected to help, even though they won't offset construction losses and a decline in consumer confidence from lower housing values, a panel of economic experts agreed.

'The traditional fall freight season no longer exists, but that structural change leads to another structural change in that January is much stronger,' said Bob Costello, chief economist and ATA vice president.

The National Retail Federation said last month that holiday gift card sales will increase 25 percent to a record $35 billion this year.

'In sum, the fall freight season is not expected to be very good, but at this point it shouldn't be horrible either,' Costello said in a report provided to the 3,000 industry officials attending the ATA conference.

Through August, ATA's truck revenue index, which excludes fuel surcharges, was up 0.2 percent compared with the first eight months of 2006.

Retail consumer growth for the 2007 holiday season is expected to be at 4 percent, the National Retail Federation has predicted, compared with a 10-year average of 4.8 percent annual growth.

Still, it's the housing market that holds the key to the nation's economic recovery and the well-being of the trucking industry, said Nigel Gault, group managing director, North American Macroeconomic Service, for Global Insight Inc.

'We are paying the price for overshooting in the housing market,' Gault said.

Anything stimulating the economy would be welcome news for Cari Sullivan, safety manager for Two Men and a Truck International in Lansing, Mich., a nationwide moving company that's been affected by the housing slump.

'If trucking isn't doing well, then no one is,' Sullivan said.

Reporter Ted Jackovics can be reached at (813) 259-7817 and tjackovics @tampatrib.com.

Loading Comments...

Email Print

ADVERTISEMENT