Donald Broughton at the CCJ Solutions Summit


Donald Broughton will present an economic overview of trucking conditions and forecasts for the coming year at CCJUpcoming Solutions Summit, “Shifting the Driver’s Paradigm: Winning with Gear, Technology and Culture,” in Chandler, Arizona, November 30-December 2 at the Sheraton Grand at Wild Horse Pass.

Broughton, principal and managing partner of Broughton Capital, LLC, is no stranger to CCJThe biannual meetings of and his unique and humorous vision of current affairs are often highlights of the event. He recently spoke early last year at a virtual event where he discussed the upcoming presidential election, the political climate, and predictions of an economic recovery after the pandemic.

When Broughton first spoke at the end of May 2020, every state in the United States had already declared a state of emergency and, with the exception of Arkansas, Iowa, Nebraska and North Dakota, the United States was subject to a form of stay-at-home warrant. The stock market was barely a month after a three-month decline and much of the country had just received its first round of stimulus payments.

Toilet paper was back on store shelves (for the most part) and the injection of cash caused many consumers to return to the market (the online market for the most part) for the goods, resulting in a patchy recovery. according to the segments served by the carriers. We might not have realized it then, but consumer habits would be forever changed, dragging the companies serving those segments with them.

So how does Broughton’s forecast of 18 months ago compare to reality?

What he said:

“Some companies will explode, Amazon for example, and others will become the manufacturer of buggy whips. All [recovery] is going to be extraordinarily dynamic and, in this case, it will be the companies that use the technology to create winning solutions. “

Broughton was bullish on the economy due to then-low interest rates, low inflation, and a continued return to domestic manufacturing. Interest rates are still low, but inflation is now at its highest level in 30 years. The shift to on-site manufacturing has proven to be a non-issue in many segments, as a generational supply chain crisis brought domestic assets and imports to a standstill.

Technology has allowed businesses, like restaurants and non-essential retail outlets, to survive a devastating business downturn as many of those who have been slow to embrace it have shut down – or have not manufactured. their buggy whips a very long time. Social distancing guidelines, either mandated by the federal government or promoted at the corporate level, also forced a transition away from the legacy paperwork that had been part of trucking for generations, and the shift to electronic bills of lading and electronic signatures was fully underway. Classes.

Amazon has certainly been a winner in the pandemic with revenues soaring by more than 30% in 2020 alone. Manufacturers of consumer packaged goods were also among the big winners. The growth rate of this segment since 2016 had been less than 2% but swelled to almost 11% in 2020. Amazon’s growth will likely be more sustained as the pandemic has accelerated the shift to e-commerce by about a decade. .

Verdict: He was right.

What he said:

“Last mile processing will explode at a rate that will only be slowed down or contained by the capacity of the warehousing infrastructure, trailers and small delivery trucks. “

Visit one of the major ports in the United States and you’ll see as many container ships floating offshore as the ocean can hold. A tidal wave of consumers, with stimulus checks and child tax credits in hand, has swarmed retailers in search of everything from wood to appliances and everything in between. As a result, it was nearly impossible to predict when carriers would receive new trucks and trailers for much of this year, and component and rubber shortages (and subsequent price increases) put the equipment aside. existing for long periods.

Social distancing made production difficult as headcount had to be cut, and thanks to several rounds of government stimulus measures, many of the affected employees never returned – or did so much later than they did. ‘would have done otherwise.

Running the last mile in particular is further complicated by a workforce participation rate hovering around 60%. If every fleet had all the drivers and trucks it needed, there wouldn’t be enough manpower available anywhere in the supply chain to handle it.

Verdict: He succeeded.

What he said:

“National ton-miles will increase at an inordinate rate for most modes. Transport companies that can rise to the challenge have the opportunity not only to increase their turnover, but also to improve their operating margins.

Virtually all of the publicly traded carriers this year have reported record revenues every quarter, and with a robust cash market – with good fares and plentiful charges – carriers that run a smart business are reaping profits. At the worst of the pandemic, many carriers stuck in modes crippled by lockdown orders (such as food service, hospitality and events, and petrochemicals) have pivoted their power units into more customer-oriented segments. consumers in their effort to “rise to the challenge.”

Truck tonnage has increased from the crater in April 2020, with peaks and valleys along the way, but is still well below pre-pandemic levels, according to the U.S. trucking associations. From the start of the year through September, compared to the same nine months in 2020, truck tonnage is unchanged.

Verdict: He was mostly right.

What will 2022 look like? Virtually all economists agree that 2022 should be a good year for hauliers – at least for the first two quarters – but you can join CCJ later this month to get Broughton’s insights into the trucking industry and details on what he sees as the biggest risks and opportunities fleets face as the New Year approaches.

Thanks to event sponsors Performance Diesel, Freightliner, Right Weigh, Comdata, Eaton, Triumph Business Capital, Shell Lubricants, Automann, Fleetworthy Solutions, Goodyear and Omnitracs, fleets can register for the Solutions Summit for free. Carriers can register here. The agenda can be found here, and our list of speakers, here. Check regularly for updates.

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