Dear Members,
As we celebrate the holiday season and the year comes to a close, I want to express my sincere gratitude to you. Your input, engagement and active participation in KTA are what keeps our association strong and successful. And your unwavering dedication to the industry, through good times and bad, keeps America moving. The state of the economy is the industry’s biggest concern right now as 2024 held its fair share of economic challenges. But the outlook for 2025 is looking slightly better.
This past October at the ATA Management Conference, Bob Costello, ATA’s chief economist, addressed this concern. “We haven’t seen normal since the pre-pandemic. Every cycle is different, this one included,” Costello said. He then shared that the general economy continues to slow, but the probability of a recession remains low as many of the main economic drivers of truck freight won’t get worse, and in some cases, even get a little better.
Costello went on to say that manufacturing output in the chemical, primary metals, computers, electronic equipment, appliances and transportation equipment sectors would climb at least 2% next year, with the computer segment jumping 6%.
Consumer spending on goods rather than services led to part of the issues in 2024. When the world was confined to their homes during the pandemic, the purchasing of consumer goods was at record levels. Once the pandemic ended, people wanted to do things rather than buy goods, so services and experiences were the focus. And as we know, when people are not buying goods, the need for trucking goes down.
Record inflation — which has taken a toll on consumer spending — is expected to cool as the Fed continues to decrease interest rates. Costello expects to see better home sales in 2025 with wage growth remaining near historic averages. This means consumers will have more money in their pockets. The positive effects of this change will come, but won’t be immediate.
The bad news is the supply sector, specifically smaller trucking companies, will possibly see consolidations and some may even shut down. One-truck owner-operators may need to lease back to another company. But, as demand rises and the supply decreases, it should equal a little better situation.
I remain optimistic about the future and am confident that better days lie ahead. As American sports analyst and former football coach, Jimmy Johnson said, “The difference between ordinary and extraordinary is that little extra.” And, if there’s one thing I know, we, as truckers, are determined, resilient and willing to go that extra mile. No matter what comes our way, we will persevere, adapt and fight for something better. In short, we will keep on trucking.
I hope you enjoy reading this issue. Thank you for all that you do to help keep KTA strong. As always, please reach out to me if you have questions or concerns, or if you just want to catch up. I always enjoy hearing from you.
Sincerely,
Rick Taylor
President, KTA
