Tank fleet executives attending the 2007 National Tank Truck Carriers Annual Conference heard a generally upbeat economic forecast from Tuesday’s speakers. NTTC is meeting through Wednesday, May 9, at the Mandalay Bay Resort in Las Vegas NV.
Martin Labbe, Martin Labbe Associates, said current indicators suggest that the US economy will grow more slowly in 2007, but this still will be one of the best years on record. The US should see growth of 1.5 to two percent during the next two quarters, and total growth for the year should be in the two-percent range. In dollar terms, that growth would equal $240-$250 billion, or $1,000 for each US citizen.
Tank fleets should find adequate freight volumes with industrial chemical production growing by about 2.1 percent. Agricultural production will be up about 3.2 percent. Fuel shipments will be particularly strong, with production increasing by around four percent. Factors benefiting tank truck carriers include surging demand for ethanol, which is generating tremendous volumes of new business for tank fleets.
While ethanol is bringing significant new tank truck activity, Labbe offered some words of caution. “The ethanol boom could end quickly in as little as five years,” he said. “We’re not going to be able to produce enough ethanol in this country to meet the alternative fuel targets. We simply don’t have enough available farm land. It also will be hard to achieve consistent quality for the ethanol being produced in various parts of the country. We won’t have enough capacity to transport the required amount of ethanol. Finally, it will be more expensive.”
Patrick Quinn, American Trucking Associations chairman, reported that overall truck tonnage is expected to grow 31 percent, to 14 billion tons by 2017. No other mode even comes close to the trucking share. Rail is a distant second at around three billion tons. “We have to remember that even when the US economy slows down like it has this year, it is still the most dynamic economy in the world,” he said.