b'JANUARY 2025TOP50NORTH AMERICAN TRUCKING COMPANIES 19(FORECASTcontinuedadministrationpromisestaxis why ATA will continue to from page 16) reliefmeasuresthatshouldadvocateforcommon-sense of the past in most regions,helpbolsterprofits.Econo- reformstothecivillitiga-saidBillConerly,Principalmistswarn,however,thattion system that curb lawsuit ofhisownconsultingfirmincreased tariffs may reigniteabuse and the rise of nuclear inLakeOswego,Oregoninflation and increase the costverdicts, Gail noted.(conerlyconsulting.com).ofgoodssold.Theyadvise Whencompanieswanttokeeping a close watch on theu nCertaintya Boutt ariffshire, theyre able to find thefollowing areas in the open- Withanewpresiden-peopletheywant,unlessing months of 2025: tial administration, there is a theyrelookingforsome-Interest rates: Going for- potential for change in tariffs, thingreallyunusualorifward, the major concern forwhichcouldsignificantly theyre not willing to pay thebusinesses will be the pace ofimpact global trade. However, required salary. interestratecutsandwherewithmanytruckingcompa-Andspeakingofsalary:they will end up, said Yaros. nies,likeXPO,developing Softening employment growth Inflation: If the consumerstrong business relationships hasgivenworkerslessbar- price index returns to positivewithNorthAmericantrad-gainingpower,soemploy- territory,thatcouldthrowaing partners like Mexico, the ersareexperiencingsomemonkeywrenchintomanypotential tariff changes could much-needed relief from thebusiness plans, said Conerly. haveasignificantimpact risingtrendlineofworker Tariffs: Tariffs amount tomuch closer to home.wages.Entry-levelhourlyprice increases for our mem- Onabroaderscale,tar-wage increases came to 3.7%bers who have to buy materi- iffshavethepotentialto in 2024 at Palisins memberals from abroad, said Palisin.significantlyincreasethe companies,markedlylowerGeopolitics:Anincreas- costofgoods,whichcould thanthevigorous8%-10%inglevelofturmoilaroundultimatelyleadtolower levelsclockedforeachofthe world can disrupt supplyconsumerspendingandless the previous two years. (His- chains,increasingshippingdemand for trucking services, torically, such increases havecosts, said Conerly. oraggressivepricingfor tended to settle in the 2.5% toConcerning as these riskstransportationtooffsetthe 3.0% range). are,economistsanticipateahigher tariffs.Nationalfiguresconcur.alsore-invigoratecommercialbusinesssentiment,theyarefairly benign operating envi- President Donald Trumps TheEmploymentCostconstruction activitya sectorhedging their bets for 2025.ronmentin2025.TheUSproposed tariffs have already Index (ECI) is slowing, saidthat has been underperforming.We look for business invest- economyhasbeenremark- causedsomeindustriesto Hoyt, referring to a commonThenon-residentialsidehasment to rise 4.1% in 2024 andablyresilientdespiteallthebegintakingactiontosafe-measureofaverageworkera kind of bad reputation right4.1%in2025,comparedtohitsitstakenoverthepastguard their profits. The tariffs, wages.Weareforecastingnow,especiallywhenpeople6.0% in 2023, said Yaros. few years, said Yaros. Wewhichincludea10-20%tax 2.8%growthin2025,com- thinkofdowntownofficeordontanticipatearecession,onallimportsand60%on paredto3.9%in2024anddowntownretail,saidCon- s uPPlyC hains as the Federal Reserve will begoods from China are causing 4.5% in 2023.erly. But office and retail areBusinessesinallsec- dialingbacktherestrictive- significant concerns for busi-Despitetheongoingde- doing okay in many suburbantorswillbenefitanationalness of monetary policy, andnesses and consumers.escalationintheECI,Hoytareas. Andalotoftheretailcommitmenttorepositiontherearenoglaringimbal- We will pass the cost of said it remains healthy enoughsectorhasbeenunder-built.supplychainsintheUnitedances in the economy. tariffs to the consumers, said to support consumer spending,People thought we were totallyStates. Logistical issues aretheCEOofAutoZoneina as does the expected increaseabandoning going to the store,persuadingmanyCEOstorecent Yahoo Finance article. in the nations total personaland it turns out were not.placeproductionclosertoUS GDPJonathan Gold, Vice President incomelevel,animportantHowever, many areas offinal consumers, said Basu.(Annual % Change) ofSupplyChainandCus-driverofbusinessactivity.the country may continue toThere is also a trend towardtoms Policy for the National LiketheECI,itisexpectedexperiencelacklusteractiv- favoring nations that provide2014:2.5% RetailFederation(NRF) tofollowafamiliar2025itywhenitcomestomulti- significantprotectionfor2015:2.9% agrees,saying,Retailers trendline:ahealthyincreasefamilyresidential,hotelandintellectual property. 2016:1.8% relyheavilyonimported despite de-escalation. Mainlyoffice construction. A changeRelieffromdeliverydis- 2017:2.5% productsandmanufacturing because of slower job growth,infortunewillnothappenruptionscantcomesoon2018:3.0% components so that they can we have the increase in wageovernight. With lower inter- enoughformanyoperations.2019:2.5% offer their customers a vari-and salary income slowing toest rates, therell be an easierSupplychainissuesarestill2020:.-2.2% ety of products at affordable 4.7%in2025,comparedtotime lining up project financ- present, said Palisin. We are2021:5.8% prices. A tariff is a tax paid by ourexpectationof6.6%foring at acceptable cost, saidseeing shortages around semi- 2022:1.9% the US importer, not a foreign 2024,and5.4%for2023,AnirbanBasu,Chairman&conductorchipsandsome2023:2.5%country or the exporter. This said Hoyt.CEOofSagePolicyGroupothertechnologicalproducts,*2024: 2.7% taxultimatelycomesoutof Maybe its a looser labor(sagepolicy.com). But theseaswellaschemicals,equip- * 2025: .2.5% consumerspocketsthrough market,butemployersareinthingstaketime.Wemightmentassembliesandmetalhigher prices.no hurry to trim their employeesee some softness in a mean- parts.Thatscausingproduc- * 2026: .2.1%rosters.Employerswanttoingful fraction of contractorstion delays and late deliveries. Sources: World Bank;P ath to thef uturemaintain their ability to jumpin2025.AndthenperhapsPalisincitesanumber* projections by Oxford Economics. Manytruckingcom-onthegrowthsideoncethethings get a bit better in 2026ofcausesforsupplychainpaniesarealreadyimple-economyreboundsalittle,astheselowerinterestratesissues.Overthepastyearmentingstrategiesthatwill saidHoyt.Soemploymentprompt more activity. thenationhaslackedsuffi- (TRENDScontinued fromenablethemtorecover levels have held fairly steady.Onesectorthatwilldocient skilled workers to meetpage 18) fromthefreightrecession welloutofthegate:large- productiondemands.AndWhile many companies havestronger, more resilient, and h ousingr eBounDs scaleinfrastructureprojects,inanenvironmentofhighbecomesavvieratpricingbetter positioned to compete Economists expect healthycomputerchipandbatteryinterestratesandslowingandadoptedtechnologiesinthishighlyfragmented growth in housing activity, amanufacturingplants,andgrowth,companiesdidnottoreduceoperationalcostsindustrysector.Somecom-mightydriverfortheecon- data centers. This is the erainvestasmuchasrequiredandimproveefficiency,onepanieslikeXPOarediver-omy.Weforecasthousingofthemegaproject,saidin new facilities. As for theline item that is significantlysifying service offerings and starts to increase by 6.2% inBasu.Futureprospectsaresemiconductor situation spe- impactingtruckingcom- leveragingtechnologyfor 2025, after falling by 4.7% inquitepositiveforcontrac- cifically,theresthishugepaniesprofitabilityis,theoperationalefficiencyand 2024anddeclining8.4%intors who are able to partici- demandcomingupagainstrising cost of insurance. improvedcustomerservice. 2023, said Yaros. pate in major public works.a shortfall in global supply,According to the Opera- InDecember2024,XPO Whytherebound?AMuch of this is driven by thesaid Palisin.tionalCostsofTruckingofficials reported many stra-decline in the cost of moneyre-emergenceofindustrialWhiletheU.S.iscom- ReportfromtheAmericantegic improvements.and a concomitant looseningpolicymaking in America, anmitted to the reshoring of pro- TruckingResearchInstituteWiththeavailabilityof ofcreditstandards.Lowereconomic transformation thatduction, the task of increasing(ATRI), truck insurance pre- technologies like Transporta-mortgage rates should help thehas led to programs such asdomesticmanufacturingandmiums rose 12.5%the larg- tionManagementSolutions single-familyhomemarket,theInflationReduction Act,deliverysystemswilltakeest jump amongst the various(TMS),truckingcompanies saidConerly.ItwillbeatheChipsandScienceAct,time.Wearenotgoingcost centers examined in thecanreduceemptymiles, littlelesspainfulforpeopleand the Infrastructure Invest- toturnthingsaroundrightreport. This issue is a top pri- optimizeroutes,andaccess with 3% or 4% mortgages toment and Jobs Act. away, said Palisin. ority for the ATA in its effortsactionablebusinessintelli-give them up, sell their currentAlltold,whileecono- to support carriers. gence allowing the carriers to houses and move up. mistsexpectlowerinterestt her oaDa heaD Insurance costs remain abe more agile and flexible to Lower interest rates shouldrates to fuel a positive turn inTheincomingTrumptop concern for carriers whichnavigate market changes.'