Pictured are Lee A. Klaskow, Bloomberg Intelligence senior freight transportation and logistics analyst; Steve Smith, senior industry advisor and president of Smith Transportation Consulting Services; KSMTA Canada Chief Operating Officer Chris Henry; and Zack King, former executive vice president and chief financial officer at USA Truck.
Cash is king but cash flow is its equally regal cousin, especially as we enter a period of economic volatility and uncertainty. However, Lee A. Klaskow, Bloomberg Intelligence senior freight transportation and logistics analyst, speaking at the American Trucking Associations Management Conference and Exhibition (MCE) in San Diego Monday, said he wasn't certain that a U.S. economic recession was imminent.
"It's scary out there," he said, adding the U.S. isn't currently in a recession, "but the likelihood is high" thanks to sputtering economic growth, higher fuel cots, a tight labor market and supply chain constraints creating inflationary pressure. Klaskow said the risk of the U.S. economy going into a recession is 60%, according to consensus estimates.
"Inflation is going to be with us for a bit," he said. "Any U.S. recession we have... will be short and shallow."
Bloomberg economic forecasts call for truckload and less than truckload carrier revenues to be flat or slightly down next year, and key drivers for revenue and earnings growth into 2023 among truckload carriers will be rate discipline as demand weakens; for LTL carriers, strong pricing through demand cycle.
To get the most out of 2023 – or to simply get through it – some carriers are conceding the high ground they've had on rates for more than a year, but Steve Smith, senior industry advisor and president of Smith Transportation Consulting Services, said he's not seeing a lot of push for rate reduction as long as capacity is there, "so don't go ask for it."
