23rd Edition
I recently took a long trip from Davidson, NC to Boston, passing through several states, Virginia, West Virginia, Maryland, Pennsylvania, New Jersey, Connecticut, and Massachusetts. During the 750-mile trip, the interstates were packed with tractor trailers. To pass the time, I started to notice that each one we passed was operated by a different trucking company. I started to wonder just how many different trucking companies existed in the country. My guess was 50,000. I wasn’t even close. The current estimate is close to 1.2 million trucking companies, operating around 3.5 million trucks which move about 65% of the goods sold in the U.S.
It would be hard to overstate the importance of the trucking industry to our nation’s economy. It would be even harder to overstate how import a strong and growing economy is to all Americans. Today, there seems to be forces that are fighting against it. Let’s explore that a bit deeper…
First, there are several key drivers of a thriving economy. Efficient logistics and transportation systems are certainly essential. Given this, we should be concerned about the potential impact on the trucking industry from the political pressure to transition to electric, self-driving trucks without sufficient infrastructure, nor adequate plans for job training for millions of truck drivers who could be displaced. Beyond that, the enormous extra weight involved with massive batteries creates significant challenges to transport the same amount of goods with the same number of trucks. For example, PepsiCo can move its Frito Lay products due to their light weight, but not its soda products which are much heavier. With smaller loads additional trucks might be necessary, making already crowded roads even worse. Every time there has been politically-motivated change there have been unintended consequences. Pressure to move away from fossil fuels will be another painful and costly example.
Second, innovation is another key driver of strong and sustainable economic growth. At its core, innovation flourishes when risk takers identify opportunities and determine that the financial upside is significantly more than the financial downside. In a nutshell, risks have to be worth taking. Free markets drive innovation. Crony capitalism and over regulation suppress it. If our country continues toward more government control and regulation, as well as further concentration of power by oligarchs, innovation will suffer.
Third, a competitive work force is essential for our country to continue to grow. Keep an eye on the ongoing battle between unions and corporations, especially between the UAW and the big three domestic auto manufacturers. At this stage it seems that the unions are content with having a larger slice of a shrinking pie, given their early demands for higher wages and a shorter work week. Often, a lust for power creates that dynamic. Both sides in a power struggle want the other side to lose, more than they want to compromise for the benefit of all. We see this in politics all too often. Virtually all political donations from unions go to one party, whose primary objective is to stay in power, just as it is for the other political party. The end result is that job creation will suffer, and the U.S. will become increasingly less competitive globally, as we produce less and import more.
Fourth, it is essential to have a continual addition of well-educated and motivated young people to drive consumption, production, and innovation. Our universities may still be the best in the world, but are graduates coming out motivated to out work and out compete global competition or are they being indoctrinated into the ever-expanding state apparatus? There may be no more destructive ideology in the world today than entitlement, given its costs, inefficiencies, and unintended consequences.
If you think I’m painting a picture of an economy that is likely to underachieve, you are correct. I’m not happy about that prognostication, but I call ‘em as I see ‘em. We aren’t doomed to this eventuality, but it will take a concerted effort to reverse these current trends. Most challenging of all, it will take dynamic, business-savvy leadership. Career politicians, entrapped by an addiction to power need not apply.
It’s a shame really for our country to be in this position, but we only have ourselves to blame. What could change our perspective and priorities? Or, more foundationally, what could give us a reordered heart? Perhaps only God knows. Maybe we should bring Him back into the conversation, especially when it comes to the important stuff. What do you think?
Please help me grow my readership by forwarding this to a friend(s). In the meantime, say tuned for my next newsletter. Thanks
Michael Kayes
*These views are my personal opinions and are not the viewpoints of any company or organization.