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Jan.9, 2017

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92 THE JOURNAL OF COMMERCE JANUARY 9.2017 2017 ANNUAL REVIEW & OUTLOOK & OUTLOOK & SURFACE TRANSPORTATION U S shipper s enjoyed a truck-pric- ing windfall in 2016, as lower freight demand, tumbling fuel prices and an abundance of available truckload capacity led to the best rate environment shippers had seen since the recession, at least in the truck- load sector. As the US slipped into its second long patch of slow growth since the recovery began in 2009 — expand- ing less than 2 percent for three straight quarters — truckload rates slipped and carriers cut pricing to fi ll trucks. What goes down often comes up, however, and shippers who enjoyed a break from truckload rate increases and even some reduction in costs in 2016 are nervous about what they'll encounter in 2017, especially in the second half of the year. That's in large part due to a Dec. 18 deadline for trucking operators and truck drivers to switch from paper logbooks to electronic logging, a huge cultural and operational change that could lead to a contraction in capacity. "We have more questions than answers about what's ahead of us," Sharon M. Perry, vice president of logistics for apparel maker Carhartt, said at the JOC Inland Distribution Conference in Memphis last November. "We see a change going on in the trucking community. Going into 2017, my No. 1 goal is to make sure I have enough capacity in all my modes of transporta- tion. The most important thing is to be agile and ready to respond" to change. The good news is that, based on inter- views, statements and surveys over the past few months, shippers do expect 2017 to be a better year in many respects than 2016. The US economy certainly left the soft patch behind in the third quarter of 2016, when real GDP expanded at an annual rate of 3.2 percent, according to the Bureau of Eco- nomic Analysis. In the 2016 second quarter, real GDP increased 1.4 percent. That 3.2 percent jump was the best GDP gain since the third quarter of 2014, which still stands as the peak of the seven- year economic recovery. Real GDP in that quarter expanded 5 percent, after growing 4 percent in the previous quarter. From the fourth quarter of 2015 through the end of the fi rst half of last year, GDP grew at an average rate of 1 percent. That's still better than the similar three-quarter soft patch in the 2012 recovery, but not by much. BY WILLIAM B. CASSIDY TRUCKING TURNS A CORNER A er enjoying pricing power for much of 2016, over-the-road shippers are preparing to pay more in the coming year

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