August 4, 2020 / By Erika / Logistic • Transport • Trucking / 0 Comments
Through Westgate’s long time involvement with and support of the Transportation Intermediaries Association, we were able to host an incredible logistics webinar featuring industry expert, Noël Perry in June 2019. Noël gave his thoughts and insights on what he saw ahead for the freight industry.
Here is what he predicted and what has happened so far…
Noel talked about ‘The Last Cycle’ and how the world we live in and transportation will change radically. In June of 2019, he expected this cycle of economic recovery to behave normally until around 2023 or 2024. Transportation follows along with economic changes so as GDP drops, freight drops as well. And when it goes up, our industry goes up as well. He talked about how GDP changes since 2000 usually only change a little from quarter to quarter.
2020 UPDATE: In the fourth quarter of 2019, current-dollar GDP increased 3.5 percent, or $186.6 billion. In the first quarter of 2020, decreased 3.4 percent, or $189.4 billion in response to the spread of COVID-19, as governments issued “stay-at-home” orders in March. [i]
In 2019 we were seeing the lowest, and slowest recovery since WW2 to help us set our expectations. The tendency is for the economy to have modest growth and that is what Noel saw ahead. He predicted a lower GDP rate in 2020 and said there was also more of a chance for a recession in 2020. His strong advice was that 2019 was the time to figure out what you will do if this outcome happens. He also said shippers should be watching their budget because he anticipated a cut will be ahead.
2020 UPDATE: The National Bureau of Economic Research said the expansion peaked in February after a record 128 months, and we’ve been sliding into a pandemic-driven recession since. The usual definition of a recession involves a decline in economic activity that lasts more than a few months.[ii]
Noel spoke in 2019 about the retail revolution and how we have 30,000 fewer store locations than in 2013 due to the boom of online sales. These online retailers are also changing expectations on delivery times since consumers are used to 1-day delivery.
2020 UPDATE: As people have quarantined at home, more than 8,700 stores are closing in 2020. We may be entering a retail apocalypse rather than a revolution![iii]
These radical changes were already happening in our supply chains before COVID altered our social and economic lives in the U.S. Westgate hasn’t missed a beat during these trying times and over the decades has been through many difficult cycles.
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