ILMA Compoundings – November 2018 - 24

A.B. Stoddard

The International Maritime Organization 2020 bunker
fuel specification, which will reduce bunker fuel sulfur to
0.5 percent from 3.5 percent beginning in January 2020,
will lead to additional disruptions in the market, Eskew
said. "It wasn't planned to be disruptive, but it sure is going
to play out that way," he explained.
U.S. oil production is expected to increase over the next
two years, and Eskew said the U.S. is close to being the
world's largest oil producer. The U.S. is already the world's
biggest total liquids producer. "Over the next three years,
the Permian Basin alone is expected to supply nearly 40
percent of world crude supply growth over the medium
term," Eskew said.
A.B. Stoddard, an associate editor and columnist with
political news site and polling data aggregator RealClearPolitics, provided attendees with an outlook on the midterm
elections. Although polling appeared to favor the Democrats, Stoddard reminded attendees that polls aren't votes.
If the Republicans don't hang onto the majority, she
said, they're in for a "death march" because they won't have
enough votes to pass anything.
Stoddard said the recent controversial confirmation of
Brett Kavanaugh to the Supreme Court could throw a
curveball into the election, noting that most of the polling
was done before the Kavanaugh controversy. "The 2018
midterm voter is a white, college-educated woman, and she
is mad," she said.

trucking capacity remains tight and shippers need to work
to become the shipper of choice to secure capacity.
Suarez said the key drivers of freight - consumer
demand, construction and factory output - continue to
grow. Suarez noted that overall freight levels remain high
and have surged, but the big story is on the supply side.
"Demand is strong, and it is important to look at capacity,
which is very, very constrained," he said.
As a result, prices are going up, with the average revenue
per mile for dry van increasing 18.5 percent this year and
tank truck revenue per mile increasing to 16.5 percent,
Suarez said.
The trucking industry is experiencing the second longest
expansion period since 1945, but he said the length of
the expansion alone won't kill it. Expansions typically die
because the Federal Reserve has to clamp down on interest
rates or because of a bubble, such as the tech or housing
bubbles that killed past expansions. However, Suarez said he
doesn't see any bubbles on the horizon.
The driver shortage continues to be a problem for the trucking industry. Suarez said the industry is short 50,000 drivers in
a driver pool of 500,000 over-the-road for-hire drivers.
Kennedy said there is very little elasticity in the market,
noting that this is the most challenging environment he has
seen in the past 30 years.
Given the current environment, it is important for
shippers to try and become the shipper of choice. "Time is
money to the carriers," Kennedy said. He suggested shippers
respect drivers, make clean restrooms and Wi-Fi available,
and have extra personal protective equipment available for
drivers to use if it is required for a delivery.

Education and Insight
Attendees could choose from three educational sessions,
which were selected to address critical issues the industry
is facing.
In the session Transportation's Rapidly Changing Landscape:
Navigating the Driver Shortage While Implementing Best
Practices, Rodrigo Suarez, economic analyst at the American
Trucking Associations, spoke along with Joel Kennedy,
director of strategic sales at C.H. Robinson. Kennedy said

NOVEMBER 2018

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Joel Kennedy (left) and Rodrigo Suarez

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ILMA Compoundings – November 2018

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