Tough times

| November 17, 2008

Financial woes are being felt throughout the trucking industry.

Times are tough for the trucking industry and not getting easier in the near future, according to American Trucking Associations President and CEO Bill Graves.

Graves gave a keynote speech at the group’s annual conference in October, where he discussed the difficulties facing the industry. “Things are not going well for our industry,” he said, “and we face some awfully tough times in the near future.”

With stock market crisis, worldwide unrest and fuel prices close to all-time highs, Graves said, the near-term outlook seems bleak.

“The economic slowdown, highlighted by the housing and automotive industries, has had a devastating impact on our tonnage, and the recent financial meltdown on Wall Street severely impacts the credit markets you rely on for the capital to run your businesses,” he told conference attendees. “All of this has contributed to a collapse in consumer confidence, driving to the sidelines the principle partners we so desperately need for economic recovery.”

Graves’ speech also followed closely on the heels of a report released by ATA stating that driver turnover and company payrolls were down industry-wide for the second quarter of 2008. At 85 percent, driver turnover was down 18 points from the first quarter and was the lowest it had been since 1998’s first quarter. The report said the payroll reductions “were minor, but fairly broad based.”

ATA Chief Economist Bob Costello said the lower turnover rate actually points to a negative for the industry and is a result of the economic downturn.

“Turnover is the lowest in 10 years for large fleets because motor carriers are shrinking their fleet size,” he said. “There isn’t a big push to hire additional drivers, and as a result, drivers are not jumping company to company as much as they did. However, turnover is down because the economy is very weak and truck freight is lackluster, not because of a fundamental change in the driver market.”

Celadon Vice President of Operations Brett Terchila said the company was finding positives in the lower turnover rate. “It’s given us the opportunity to really partner more with drivers that are willing to help us drive our business well, the guys that are going to want to get good fuel economy and really promote safe driving.”

Still, the economy is having its impact on Celadon, and Terchila said the company had to “do some consolidation where it was necessary, and where it was possible to do more with less, we’ve been forced to do that in some cases.”

For Con-way Truckload, the internal impacts have not been as heavily felt, and President Herb Schmidt said the company actually had added 300 trucks since the beginning of 2008. But the overall effect on the industry is one that has not left the company untouched.

“It’s still a very challenging environment as far as transportation’s concerned, for us and everyone,” Schmidt said. “Regardless of the [market] bailout, I think the recovery process is going to be a long and tenuous one. I suspect that the transportation companies that are heavily in debt, that are over-capitalized, will still struggle for the next six to nine months. I would be surprised if a lot don’t go out of business.”

ATA’s Graves did point out that there are some actions industry leaders and drivers can take to offset the negative impacts of the economy. He encouraged planning, teamwork and greater knowledge of the nation’s infrastructure, as well as being involved with upcoming elections and legislative issues like the pending discussion on highway reauthorization.
- Misty Bell


Navistar Dedicates New Engine Plant
Navistar Engine Group dedicated its new MaxxForce big bore engine facility Sept. 23, also celebrating the 75th anniversary of its first production of a diesel engine, the D-40.

“This milestone is about much more than an anniversary,” said Dan Ustian, chairman, president and CEO of Navistar. “This is about our scientists, designers, engineers and manufacturing personnel around the world, who for decades have been responsible for the performance and quality that made reaching this point possible.”

The plant in Huntsville, Ala., has been producing the MaxxForce 11 and MaxxForce 13 at low volumes. Officials said the company expects a steady increase in volume. Navistar has an older engine plant a mile away that produces V6 and V8 diesels for consumer vehicles, commercial trucks, school buses and recreational vehicles.

“Huntsville was selected to produce these new big bore diesel engines because of our talented and dedicated workforce in Huntsville and its clear track record of building high-quality engines at a competitive cost,” said Jack Allen, engine group president. Alabama Gov. Bob Riley also cited the company’s strong work force in his remarks.

Designed specifically for International Class 8 trucks, the MaxxForce 11 and MaxxForce 13 engines are available in the WorkStar severe-service truck, the TranStar regional-haul truck and the ProStar long-haul truck. A larger version of the MaxxForce 13 will be available by 2010 for the new LoneStar, the company’s premium owner-operator truck.

The six MaxxForce big bore models offer ratings of 330 to 475 horsepower and 1,250 to 1,700 lb.-ft. of torque. The engines will use exhaust gas recirculation to meet U.S. Environmental Protection Agency emission standards for 2010.

In 1933 Navistar, then International Harvester, launched its first production diesel, a 50-horsepower, four-cylinder engine for stationary and agricultural applications. Today, Navistar focuses exclusively on high-performance diesel engines for customers including Ford Motor, General Motors, Volkswagen, Volvo and Land Rover.
- Max Heine


Aaron Tippin Joins Arrow’s Back on the Road Program
Country artist Aaron Tippin has teamed with Arrow Truck Sales’ “Back on the Road” 2009 campaign. The program is designed to help a deserving trucker in need of a truck and a job.

Starting this month, Arrow will solicit stories from truckers who lost their truck and their livelihood through unfortunate circumstances beyond their control. The trucker whose story is selected will receive a 2006 Volvo VNL 670, courtesy of Volvo Trucks North America (Arrow is part of the Volvo Group), a one-year work agreement with Heartland Express and other products and services.

“I am very excited to work in support of the American trucker,” Tippin said. “The Back on the Road program goes to the heart of the trucking world to provide assistance in this most personal way.”

Tippin, a former truck driver whose new album In Overdrive is scheduled for release in February, will play an active role throughout Back on the Road, including participating in the winner selection committee.

Entries should include a compelling 250-word story explaining why this person deserves to win. Arrow will accept nominations between Nov. 3 and Jan. 16 at www.backontheroad2009.com, will announce the winner in March and will present the truck and other prizes during the Mid-America Trucking Show (MATS), March 19-21 in Louisville, Ky.

From the program’s sponsors, the winner also will receive:

  • Business consulting tools, courtesy of ATBS

  • One year of oil changes, courtesy of Chevron
  • Tires, courtesy of Michelin
  • Truck accessories and fenders,

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