It is a decent time to truck in the U.S. The economy is solid, cargo needs to move, and rates are on the ascent.
Eric Starks, the director and CEO of FTR, indicated a few promising markers amid a business symposium for Volvo merchants and clients.
The ATA Tonnage Index and FTR Loadings Index, which track total cargo levels, are both inclining upward. The flatbed showcase specifically has been going “insane”, to a limited extent in view of expanding fracking action and the related need to move pipe and fracking sand, the last of which is moved in boxes, he said. “It’s gobbling up an immense measure of limit.” Everything from buyer spending to home deals are adding to the request. “We’re essentially at 100% usage,” Starks says of the ongoing limit condition. “We have not seen anything like this previously.” It’s among the variables that are driving cargo rates upward – over 25% higher in the present spot showcase alone. When contract and spot rates level out, he anticipates that them will be 12-15% higher than a year ago, barring fuel extra charges. The inquiry is the amount of that expansion shippers will at acknowledge.
Still, there are potential challenges on the horizon. Starks is increasingly concerned that the U.S. administration will “blow up” NAFTA with the hopes of rebuilding the trade deal. “It’s too volatile to say for certain,” he admits. And his economic concerns don’t end there. Threats of a trade war with China, driven more by political decisions, create concerns around steel and aluminum prices. The recent U.S. decision to pull out of a nuclear deal with Iran could affect fuel costs. The same U.S. tax cuts that boost economic growth are also adding to the deficit, which could push interest rates higher.
There is more change to come, too. In the short term, Starks focuses on omni-channel delivery patterns that are reshaping the way goods are delivered between manufacturers and consumers. Even artificial intelligence is driving business decisions. “This is a here-and-now issue. This isn’t something down the road,” he said.
Looking five years in the future, he sees a larger role for additive manufacturing, often referred to as 3D printing. No longer limited to prototypes, it is now part of manufacturing processes, building products in metal, polymers, concrete, biomaterials and more. “We’re going to be shipping polymers. We’re going to be shipping all these kinds of resins,” Starks predicts.
UPS is actually preparing to launch a service that will have an additive manufacturing machine in the back of a truck, building products as they move down the road, he adds. “That is something they’re already in the process of doing. They’ll be launching that very, very soon.” Of course, there will need to be safeguards to ensure that the files used to make such products disappear once something is actually produced.
Starks certainly sees a role for the printers in trucking’s aftermarket, ensuring quicker deliveries of parts.
Those who think 3D printed parts wouldn’t last on a truck are mistaken, he said, referring to aviation applications as an example. A GE jet engine nozzle that was once made from 20 parts is now made with one 3D printed part. Boeing is also making titanium parts for its 787 Dreamliner.
The products are built to last, and they’re reshaping the future.