Trump Economy Starts Truckin’
At the end of October, the economic news could not be better, for one, the Bureau of Economic Analysis confirmed real gross domestic product (GDP) increased at an annual rate of 3.0 percent in the second quarter and according to their "advanced" estimate, the third quarter would see a bump and 3.1 percent growth.
From old-school economic prediction comes another great number to roll down the US economy’s long road—orders for durable goods. Durable goods are items ranging from toasters to aircraft meant to last three years or more.
In September according to US Commerce Department numbers, US durable goods orders rose 2.2 percent, more than double the 1 percent predicted. The surprise growth comes after eight straight months of order growth. Everybody in trucking understands that what is good for the US economy is good for our industry and vice-versa. Here’s a great example. According to Reuters, the rise in demand for durable goods was fueled by a 5.1 percent rise in demand for transportation equipment.
Trump’s economy emerges
Reuters’ analysts pointed out that the rise in the country’s economic fortunes have been steadily rising for the last eight months, which pretty much matches the timeline since Donald J. Trump was elected as president last November. Although that might sound simplistic, the man has managed to accelerate the economy faster than, since dare we say, Ronald Reagan?
President Trump beat the opposition on a number of promises, but one he is delivering on, and something that began almost the day he took office, was his promise to relieve US companies of the financial and operational stranglehold the country’s heavy regulatory burden.
Trump famously proposed to kill two regulations for every new one proposed--so far, according to CNN Money, “He's exercised his authority -- in unprecedented fashion -- to repeal 14 Obama-era rules and wipe out or delay 860 prospective rules federal agencies planned to work on this year.” Not too shabby. And it is having the desired effect.
As the president forwards his economic agenda, the news gets better because part of his economic crusade includes addressing the great burden taxation has on business and seeing to aligning famous trade deals like NAFTA to better support US economic interests. The president, in delivering his agenda, has included businesses and their leaders from every sector of the US economy, but none have received the time and attention he’s been paying to the trucking industry.
Addressing the American Trucking Association (ATA) October 12 he said “America First means putting American truckers first.” Hell yes it does. According to Washington-watcher The Hill, Trump said “Nothing gets done in America without the hardworking men and women of the trucking industry, America depends on you for the fuel that powers our cars, the produce that nourishes our communities, and the beautiful steel that sends up our tallest skyscrapers.”
According to ATA stats, trucking serves as a barometer of the US economy, representing 70.6 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled nearly 10.5 billion tons of freight in 2016. Motor carriers collected $676.2 billion, or 79.8 percent of total revenue earned by all transport modes.
During the 45-minute address, president Trump singled out Kevin Burch, president of Jet Express and chairman of the American Trucking Association. In reports from major news outlets including Fox News Insider, Trump turned to Burch and said “Kevin says if Congress passes our tax relief and reform plan, he will be able to invest in new equipment and additional training. He wants to create more American jobs. We are helping him do exactly that.”
On the morning news shows, Burch said he's optimistic that Congress will pass Trump's tax plan, which would be a boost to the U.S. economy and the trucking industry. If the fact that the House passed the bill at this writing is any indication, he’s going to be right.
Burch explained to the audience that many of the companies in the American Trucking Association are small businesses, and that cutting business taxes will greatly help them, because “there would be more products to deliver and more contracts to fill,” said Burch.
Burch pointed to the obvious comparison: the proposed tax cuts remind him of what President Ronald Reagan was able to accomplish, and he predicts similar economic growth if lawmakers take swift action. "The bottom line is: We want to reinvest. There's new technology, new tractors, new trailers. Those are things that so many of us have been hesitant to invest in.”
Freight hauling data and other numbers are confirming the rising tide is lifting all boats, er, -trucks. For example, Although ATA’s advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index slipped slightly (0.9 percent in September) following a 4.7 percent gain during August. But the good news among the caveats and equivocations is that overall rates are up 7.4 percent from the same period last year and that includes disruptions from hurricane season’s storms.
“September’s small setback doesn’t worry me. Freight has been improving and I would have thought tonnage last month would have been softer than it was,” said ATA Chief Economist Bob Costello. “Tonnage gave back some of the solid gain in August, but remains at very high levels despite the weather-related issues during the month--going forward, rebuilding from those hurricanes and other natural disasters like the wildfires in California will add to freight demand.”
Eminently true; US truckers fuel the economy and are there to help it rebuild as well. There is indeed great evidence that the economy is generating a real head of steam, with a host of fundamental barriers being stripped away to help drive its benefits deeper into the economy and people’s lives than in the last 30 years.
Among all this good news, let’s not forget that the industry itself still faces some pretty stiff headwinds that could slow trucking’s fortunes—like the driver shortage and the increased regulation like compliance with ELD mandates. Nevertheless, all involved, fleets, fleet drivers and independents are all involved and stand to profit and grow with hard work and focus.
The Dow has never been higher—and that’s because those casting bets have already baked in the lift Trump’s Truckin’ Economy is giving and will continue to give to this country’s good fortunes. It’s our time too. Trucking’s role in making America Great has never been stated so clearly by this country’s president.
God Bless America and God Bless America’s truckers!