ACC 12: Chapter 11 Article

http://lfpress.ca/newsstand/Business/BusinessMonday/2008/10/06/6990796-sun.html

Summary

The article I read was written by Norman De Bono, a writer from “The London Free Press.” His article is about the trucking industry in North America and the brunt caused by U.S.’s economic slowdown. The decrease in truck sales and production indicates that an economy isn’t doing well. It is expected that fewer trucks will be needed to ship goods since Canadian businesses are being tugged downhill by the U.S economy because they are heading toward recession. As a result of the slowdown freights are shrinking and workers are being laid off. Factors that will maintain the slowdown are new emission standards, rising cost of fuel, rising value of loonies in Canada, and reduced fleet sizes. Some experts say that the North American trucking industry will start to recovery in late 2009 or early 2010.

Connection

The connection i made between chapter 11 of the accounting textbook and the article written by Norman De Bono are the freight-in figure and merchandising businesses. Freight-in is the delivery charges on incoming merchandise. The North American trucking industry will probably have to increase their delivery charges because of the decrease in revenue and the increase in the cost of fuel. If the freight-in figure increased, it would cause merchandising companies that need a delivery for there purchases to earn less revenue or raise their prices on their merchandise. In conclusion, if the trucking industry is doing poorly the economy is affected by it.

Reflection

Experts say that a recovery may happen in late 2009 or early 2010. I think it would take longer than that for the trucking industry to start recovering. With the U.S economy heading toward recession, I believe it would take more than just one year, unless the new president makes some good decisions. With the new emission standards and the rising cost of fuel, I wouldn't be surprise if a North American trucking company goes bankrupt. I think most small trucking business will take a great loss in sales before a recovery will start. I hope this situation will get better as soon as possible, because many people are getting laid off.