In the past few weeks, a great deal of attention was focused on several incredibly fierce hurricanes. At the same time, many of us were adjusting from the summer break, getting our children ready for the start of the school year, and preparing for the Yomim Tovim. This has left little time to think about the system that delivers emergency supplies to hard-struck areas, ships school books and related materials for students to use in their classrooms, and brings the food, clothing, and sefarim we need for our holidays. The fact is that although trucks get very little attention, they play a vital role in the lifestyle we enjoy, have come to expect, and depend on.
What would happen if an unexpected development would shut down the trucking system for just a few weeks? The answer is very clear, according to transportation expert Alice Friedemann: chaos would erupt everywhere.
The trucking industry plays a surprisingly important role in the U.S. economy and its indirect impact is even greater. The following statistics bear this out.
There are an estimated 3.5 million truck drivers in America and 15.5 million trucks in use. Trucks deliver nearly 70 percent of all the freight transported – almost $800 billion in manufactured and retail goods. There is an additional $200 billion in truck trade with Mexico and another $300 billion in truck trade with Canada. Indirectly, the industry employs nearly 9 million people.
This may come as a surprise to those of us who never give a second thought to the trucks we see on highways and that make deliveries to the stores we patronize. But without them society could not function because there’s a lot more than statistics involved in this industry.
The following are some of transportation expert Friedemann’s specific predictions about what would happen if trucks suddenly stopped delivering their goods:
*Within a matter of hours, gas stations would be out of fuel, and all of the estimated 253 million cars and trucks in the U.S. would quickly come to a stop;
*Within a few days, grocery stores would be out of dairy products, and by the end of a week their shelves would be completely empty;
*Airplanes would be grounded, ships would be stuck in harbors, and trains would come to a standstill;
What would happen if an unexpected development
would shut down the trucking system for just a few weeks?
*Hospitals, pharmacies, and factories, which typically depend on several deliveries of goods each day, would start running out of supplies on the first day;
*On the second day, panic buying and panic hoarding would begin. Restaurants would be forced to close and ATMs would be out of money. An increasing amount of trash would not get picked up;
*A steadily increasing number of factories and businesses would be forced to close. Feed could not be delivered to animals, livestock would die, and food would become increasingly scarce and precious overnight;
*Within two weeks, some communities would begin running out of clean water, and coal-powered power plants would not be able to produce electricity.
*Even worse, skilled workers would not be able to maintain the safety of dozens of nuclear power plants around the country,
Of course, along the way there would be panic buying, panic hoarding, price gouging, fish fights, and robberies as people, fearing for their lives and those of their families, begin being erratic, unpredictable, and irrational. And as electricity, food, technology, and data systems fail, our entire society would break down unbelievably quickly.
Trucking is probably one of the least-exciting industries, yet no one can dispute the vital role it plays in the economy or that it will continue to. Here’s one reason why: In mid-Sept 2017, the population of the U.S. was 327 million, and this number will reach an estimated 420 million by 2050. And as the population increases, the economy will have to supply many more products and services, and trucking will continue to play an important role in delivering all of this additional freight.
Like other industries, the fortunes of trucking fluctuate in large part with the strength of the economy. In 2008 and 2009, the worst years of the Great Recession, business slumped sharply and so did trucking. However, since then it has enjoyed steady, although not rapid, growth, averaging about 2.4 percent over the past five years.
Analysts believe trucking will continue to play a vital role in the economy. And some sectors of the industry have caught the attention of Wall Street’s best and brightest.
Bill Gates, the wealthiest person in the world, has thrown his support behind Convoy, a start-up that initially was pitched as an Uber of trucking. Other backers of Convoy include Amazon’s CEO Jeff Bezos and other heavy-hitting financial wizards.
And solar car maker Tesla was expected to unveil a new super-powerful electric commercial truck by the end of Sept., a move that Wall Street firm Morgan Stanley expects will reignite investor interest in the company’s stock. Investopedia says Tesla’s truck might be able to drive itself and automatically move in “platoons” with other rigs. According to analysts Ravi Shankar and Adam Jonas, Tesla’s new truck will likely force other vehicle manufacturers to unveil their own electric vehicle commercial truck plans.
Orders for the truck will be accepted immediately and the truck will go on sale in 2020. The Street expects Tesla to deliver 25,000 of these vehicles a year and generate additional revenues from leasing batteries, according to Morgan Stanley.
Separately, Morgan Stanley’s favorite stocks in the trucking industry are Schneider National, New Dimension Resources, XPO Logistics, Old Dominion Freight Line, and Werner Enterprises.
Other analysts have a somewhat different list. The Street has compiled a list of transportation infrastructure stocks rated highest by its value-focused approach. The following is a list of the top five companies on this list: Old Dominion Freight; Marten Transport; Landstar System; Hunt (JB) Transport Svcs; and Werner Enterprises. Old Dominion is rated “A” and the other four are rated “A-.” Interested investors can also choose from a number of ETFs that track the industry.
At a time when Wall Street focuses mostly on a few social media stocks and a few high-tech stocks, trucking may not be getting the consideration it deserves. In fact, highly rated freight companies have been very solid performers both on the highway and on The Street. It’s worth asking your financial expert for more details.
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when the trucks stop running.
Gerald Harris is a financial and feature writer. Gerald can be reached at firstname.lastname@example.org