A Rocky Global Highway

The financial crisis that's putting a new squeeze on freight transportation is also shining harsh light on overseas investment by U.S.-based trucking companies, pushing companies to take a new look at how and where they invest in efforts to bring global business into their networks.

Whether the massive federal bailout keeps the stalling economy from lapsing into a long-term recession, weak demand and unprecedented turmoil in the credit markets could cool what has become an important effort to push more deeply into expanded supply chains.

"When the entire logistics system depends upon performance in overseas production areas, then owning something in those areas adds control to the transportation system," said Donald Ratajczak, emeritus professor at Georgia State University and consulting economist for investment bank Morgan Keegan. "And when the cost of transportation is rising so rapidly because of fuel, greater control of your entire system certainly makes sense."

A global recession, however, would reduce the near-term return on those investments, Ratajczak said, and make it harder for transportation companies to pull the trigger on expansion, especially when it involves hard assets. Full Story........