Ready for the long haul: Alaska truck and rail review.

• Author: Tyson, Ray
• Position: Statewide surface transportation

Can the positive trends in statewide surface transportation continue for another year?

Alaska's trucking industry appears to be in for another good year, although economic uncertainties may lead to a downturn in the overland freight business, lifted the past few years by strong performances in the construction and retail sectors.

Meanwhile, the state-owned Alaska Railroad is expected to post a modest gain in freight income in 1994, following a year in which gross revenues slipped into the red. Long-term contracts coupled with a reduction in staff should help keep the railroad on an even keel, in spite of Alaska's shaky financial condition.

However, the future appears to be less certain for the trucking industry, which is tied directly to Alaska's oil-dependent economy. With North Slope crude production on the decline and oil prices at historic lows, truckers and others who count on consumer spending and state construction dollars to make ends meet could be in for a bumpy road ahead.

TRUCKERS LEAD

Frank Dillon is executive director of the Alaska Trucking Association, which has about 220 member companies, or 75 percent of the industry, stretching from Ketchikan to Barrow. He believes that an economic downturn in Alaska is inevitable given the deteriorating health of the state's oil and gas industry.

"We've had a couple of good years, and I would say we more or less led the economy up," says Dillon. "But we, as an industry, have a great deal of fear that we will be leading the economy down. That downturn in economic activity, of course, is freight on trucks. It's as simple as that."

Nonetheless, Dillon is hoping the construction and retail boom of last year will continue to keep truckers busy for the balance of 1994, although more likely at a slower pace.

"We moved an awful lot of freight into the big buildings around town here," notes Dillon. "We're just hoping that it's not a one-shot deal, that there will be more freight that we can move in for those retailers. Right up and down the Railbelt we've been developing these places."

The problem, adds Dillon, is that there appears to be way too much retail space to support Alaska's relatively small population.

"I don't see what's going to sustain the viability of their operations, unless we are going into a period of sustained and rather significant growth," he says. "But everything I've seen in this economy tells me just the opposite."

Roughly 75 percent of the freight handled by Alaska's...