Truck Driving Jobs

RostyC · #1 (**permalink**) 09-08-2009, 03:19 PM

Article link here

I'll post the article below:

Quote:

Truckload Rates Not Yet Bottoming
John D. Boyd | Sep 4, 2009 5:32PM GMT
The Journal of Commerce Online - News Story

* Truckload
* | Intermodal Shipping
* | Trucking
* | United States

Spot pricing at times below intermodal, analyst says, from “desperate” rate policies

Freight rates in the truckload market, competing in many cases with rail-truck intermodal traffic, are steadily declining “without solid evidence of bottoming,” said transport stocks analyst John Larkin of Stifel Nicolaus.

Larkin said his group had held meetings in the past week with executives of “various publicly traded and privately held truckload and intermodal providers,” and spot pricing for truckload freight “remains under pressure.”

Some truckload rates have “come in below intermodal rates and below what many carriers believe to be truckload variable costs,” he told clients. “We believe this level of spot pricing is unsustainable for the smaller, less-capitalized carriers that seem to have adopted what we consider desperate pricing policies.”

Larkin said some “non-sustainable trucking operations” that offer the low pricing are staying in business because they are getting help from creditors and equipment lessors, who hope those carriers can stay afloat until their equipment returns to book value.

“Many industry players believe that this stance taken by many financiers only delays inevitable truck company failures, and won't reduce (and might increase) the size of losses ultimately realized by the lenders, lessors and finance arms of major truck manufacturers,” he said. “In the meantime, the lenient policies preserve too much capacity in the trucking marketplace.”

Wow, just wow.

Looks like we have a lot of failures to come yet. There are companies hauling for below their variable costs??? That's not counting there fixed costs. Jeezuz.

It looks like the banks at this point would rather stick there neck out for these companies because they don't want the trucks, trailers, or perhaps any real estate should the company collapse. That really gives a clue how bad it is.

I know things will eventually get better but it makes you wonder how far off it really is. I also wonder what the real unemployment number is, also people that lost their jobs but have taken something cheaper and don't have any "extra" spending money. Things just aren't moving.

solo379 · #2 (**permalink**) 09-08-2009, 03:57 PM

Quote:

Originally Posted by RostyC

Article link here

Wow, just wow.

Is that comes as surprise to you?

RostyC · #3 (**permalink**) 09-08-2009, 04:56 PM

I wouldn't say a surprise, but with some of these guys saying the recession is over and the fact that trucking generally recovers two to three months ahead of other industries I think it's concerning news.

Just where is this recovery? I don't even smell a whiff of one.

no_worries · #4 (**permalink**) 09-08-2009, 05:20 PM

Quote:

Originally Posted by RostyC

I wouldn't say a surprise, but with some of these guys saying the recession is over and the fact that trucking generally recovers two to three months ahead of other industries I think it's concerning news.

Just where is this recovery? I don't even smell a whiff of one.

Freight volumes actually usually lead the general economy by 6-9 months. Considering we are still seeing declining volumes in both trucking, intermodal, and rail, I would be dubious of any recovery claims.

We'll see a slight uptick in volumes this Fall due to inventory replenishment, but it will barely register as a blip due to continued oversupply. Until consumer demand actually picks up sometime next year, rates will continue to be ugly.

GMAN · #5 (**permalink**) 09-08-2009, 06:00 PM

If it weren't so serious I would have laughed when I heard that the recession was over. I don't think we have seen the bottom for rates. I still see too much capacity and not enough freight. At least we do have freight, just not enough of it. You can stay busy if you want to run for $1/mile. You just won't make any money. We still need to hunker down, keep costs low and negotiate for the best rates we can get. If you think that you will be able to survive on $1/mile freight you will have a rude awakening. The politicians want to put a positive spin and make the citizens think that their stimulus tax has done it's work. They hope to quash any opposition by convincing the citizenry that the recession is over and things are getting back to normal. I don't see things getting much better until at least some time next year. Until we lose more capacity we are not likely to see rates turn around. As we head into our slow season you can expect downward pressure on already low rates.

no_worries · #6 (**permalink**) 09-08-2009, 10:02 PM

It's not the politicians claiming the recession is over...at least not the ones that matter. Wall Street analysts are the ones making the noise and some European politicians, who may actually be right as far as they're concerned. If anything, administration officials have been more conservative than many in their assessments. The fact is, we are in better shape than we were six months ago, or even a year ago. Much of the unknown has been taken out. The stimulus debate is relatively pointless; it's difficult to prove or disprove either side of the argument. The worst of the fall is over, but we're in for a slow slog back up the hill.

Dejanh · #7 (**permalink**) 09-08-2009, 10:10 PM

Quote:

Originally Posted by no_worries

It's not the politicians claiming the recession is over...at least not the ones that matter. Wall Street analysts are the ones making the noise and some European politicians, who may actually be right as far as they're concerned. If anything, administration officials have been more conservative than many in their assessments. The fact is, we are in better shape than we were six months ago, or even a year ago. Much of the unknown has been taken out. The stimulus debate is relatively pointless; it's difficult to prove or disprove either side of the argument. The worst of the fall is over, but we're in for a slow slog back up the hill.

Nothing is over, party just started....

There's still inflation to come and where is government debt.....

wait and see...

Mr. Ford95 · #8 (**permalink**) 09-08-2009, 11:09 PM

Things are better than 6 months or a year ago? The unknown has been taken out? That is a total load of BS right there. Unemployment might be going down but it's because Americans are taking jobs that were previously held by immigrants who have gone back home due to the economy. As Rosty said, those jobs pay much less so people simply don't have the money to spend, only enough to pay the bills.

My company is in construction and we are hoping to make it to Xmas right now. After we get our normal week off for Xmas, we may not have a company to come back to. I've talked with our majority owner face to face. He says he will do everything in his power to not let the company go under or close the doors to save his money. In his words, it would be too difficult to re-open if we did that. The unknown is still there..........as long as my job is still insecure I am not going to run out and spend money like crazy. I'm packing it away as best I can just in case the owner runs out of money before everything picks back up again. What I have heard, late 2010-2011 is when things will begin to take off with the economy. Commercial and industrial growth will stay stagnate until 2012-2013.

no_worries · #9 (**permalink**) 09-09-2009, 12:10 AM

Quote:

Originally Posted by Dejanh

Nothing is over, party just started....

There's still inflation to come and where is government debt.....

wait and see...

And the impact will be...?

no_worries · #10 (**permalink**) 09-09-2009, 12:16 AM

Quote:

Originally Posted by Mr. Ford95

Things are better than 6 months or a year ago? The unknown has been taken out? That is a total load of BS right there. Unemployment might be going down but it's because Americans are taking jobs that were previously held by immigrants who have gone back home due to the economy. As Rosty said, those jobs pay much less so people simply don't have the money to spend, only enough to pay the bills.

My company is in construction and we are hoping to make it to Xmas right now. After we get our normal week off for Xmas, we may not have a company to come back to. I've talked with our majority owner face to face. He says he will do everything in his power to not let the company go under or close the doors to save his money. In his words, it would be too difficult to re-open if we did that. The unknown is still there..........as long as my job is still insecure I am not going to run out and spend money like crazy. I'm packing it away as best I can just in case the owner runs out of money before everything picks back up again. What I have heard, late 2010-2011 is when things will begin to take off with the economy. Commercial and industrial growth will stay stagnate until 2012-2013.

We're talking the general economy, not individual circumstances. Do you remember what the economic outlook was 6 and 11 months ago? Nobody had an inkling of what was going on or what was to come. We know where we stand now. That alone is drastic improvement, it allows companies to plan. Things may look bleak regarding your own situation...that's not what I was referring to. As for your growth projections...sounds like a long slow slog to recovery to me.

b00m · #11 (**permalink**) 09-09-2009, 02:44 AM

The economy will be in a dump for a time to come.The only way to bring real economic growth ,will be by bringing back the manufacturing jobs the USofA has been losing for quite a while.This economy lived unrealistically on cheap credit until now,when the bill has come due.The only job growth i can see is through the energy jobs that have been talked about.Too bad the government has it's nose to deep in this.

As far as trucking is concerned,you guys pointed out what is goinging on. Hopefully,some mega carrier(S) will go under soon and that way freight will be avaiable for the small owner op.That's right let small business flourish and thrive,not the super big corporations that are being controlled by anybody in this world with the right amount of $$$$.

SickRick · #12 (**permalink**) 09-09-2009, 03:27 AM

Fear & Desperation? Think I mentioned those factors in the "just say no to cheap freight" discussion.

Rail has been touting intermodal as a less expensive alternative to long haul truckload rates - and they ARE correct - it IS LESS EXPENSIVE to put the box on a train. If you are not under any predictable time constraints for DELIVERY, as a train pretty much "gets there, when it gets there". Seeing a lot of MAJOR CARRIERS boxes going by at RR X-ings. This is NOT a thing of the past, and we may see MORE OF IT in the future.

More boxes on trains means LESS boxes on trucks (duh), means carriers DESPERATE to stay in the game, that aren't BIG ENOUGH to load plan and leverage intermodal for the less time-constrained loads, will attempt to have rates that COMPETE with those of intermodal (which is foolish, as you CAN'T compete with a rig that can pull HUNDREDS of trailers at the same time).

Where WE used to think of intermodal as containers that come off container ships, go on trains, and WE drag them the last mile - there are probably more TRACTOR TRAILER type TRAILERS on these trains now, than ocean-going intermodal containers. And EVERY ONE OF THEM, means some DRIVER is NOT PULLING IT.

Oh yeah - we ain't seen NOTHING YET.

Rick

no_worries · #13 (**permalink**) 09-09-2009, 05:29 PM

Quote:

Originally Posted by SickRick

Fear & Desperation? Think I mentioned those factors in the "just say no to cheap freight" discussion.

Rail has been touting intermodal as a less expensive alternative to long haul truckload rates - and they ARE correct - it IS LESS EXPENSIVE to put the box on a train. If you are not under any predictable time constraints for DELIVERY, as a train pretty much "gets there, when it gets there". Seeing a lot of MAJOR CARRIERS boxes going by at RR X-ings. This is NOT a thing of the past, and we may see MORE OF IT in the future.

More boxes on trains means LESS boxes on trucks (duh), means carriers DESPERATE to stay in the game, that aren't BIG ENOUGH to load plan and leverage intermodal for the less time-constrained loads, will attempt to have rates that COMPETE with those of intermodal (which is foolish, as you CAN'T compete with a rig that can pull HUNDREDS of trailers at the same time).

Where WE used to think of intermodal as containers that come off container ships, go on trains, and WE drag them the last mile - there are probably more TRACTOR TRAILER type TRAILERS on these trains now, than ocean-going intermodal containers. And EVERY ONE OF THEM, means some DRIVER is NOT PULLING IT.

Oh yeah - we ain't seen NOTHING YET.

Rick

Intermodal satisfies one segment of the freight market. If time and service constraints are relatively lax, intermodal is a great way to go. A small carrier can't compete against the commoditized segment of the industry. The same goes for those trying to compete against the big carriers. You can't do it for less than they can and still make a comparable living. Why try? The small guy has to leverage those things he CAN do well and find his niche.

As a sidenote, intermodal volumes have fallen faster than truck volumes during this decline. Even when thing turn around, rail will always have constrained capacity. There is only so much rail out there. Yes, they're raising overpasses back east to allow the double-stack trains, but what are they going to do after that? With that capacity restraint comes pricing power. Rail's bread and butter is bulk commodities. Intermodal will get priced out before bulk because trucks provide an alternative. Obviously, none of this is a concern until things turn around down the road, but the fears about intermodal taking over freight are way overblown. The projections show trucks actually increasing their share of tonnage moved over the next 10-15 years. Oh, and a lot of those trailers you see on trains, especially the east to west trains, are empty trailers being repositioned.

heavyhaulerss · #14 (**permalink**) 09-09-2009, 09:08 PM

yes I guess I think I know where we are at. lets see... the government has been telling us to reduce our debt levels, & at the same time put us in so much debt via this stimulus, that by just the tax burden we will have to face for decades to come, we will all be in debt... debt to the government, via taxes, though under different titles. the more responsible we are, the less responsible the government is. I am ready for a revolution.

no_worries · #15 (**permalink**) 09-10-2009, 01:31 AM

Quote:

Originally Posted by heavyhaulerss

yes I guess I think I know where we are at. lets see... the government has been telling us to reduce our debt levels, & at the same time put us in so much debt via this stimulus, that by just the tax burden we will have to face for decades to come, we will all be in debt... debt to the government, via taxes, though under different titles. the more responsible we are, the less responsible the government is. I am ready for a revolution.

Other than a brief respite during the Clinton years, that's been the story since at least the early 80's. No sense getting all fired up about it now.

GMAN · #16 (**permalink**) 09-10-2009, 03:38 AM

Rail has limited capacity. Even if they start double stacking containers on these rail cars, they may need to reinforce rails to support the added weight. That takes time. Other than limited capacity, rail also has a service problem. They cannot give door to door service as can trucks. They also cannot meet the demands of the market as well as trucks. It can take 2 weeks or longer to travel across the country for a rail car when a truck can move the same load in 2-4 days. There are too many products that need to have shorter delivery times than rail can offer.

I don't see rail dramatically affecting trucking in the near term. Whether this country manufacturers or distributes their products they must be moved by truck. Even if it goes by rail, they still cannot get it to the consumer without trucks. It is possible we could have a little uptick leading up to Christmas. I expect consumers to be more conservative in their buying this holiday season. I don't see any more clarity in the economy than we had a year ago. People don't yet know how much their tax burden will go up with this out of control president and congress. They can't print the money fast enough. When people are scared they don't spend money. Spending would help the economy, but until consumer confidence returns they are going to hold their money close. Some people don't know if they will have a job when Christmas gets here. There is still much uncertainty. People have become much more suspicious of the congress and president and for good reason. I don't see any more confidence than a few months ago.

no_worries · #17 (**permalink**) 09-11-2009, 12:10 AM

No more clarity? We're talking macro here, not micro. A year ago (almost anyway) we were looking into an abyss. Nobody knew if the banking system would survive, credit was locked up tighter than a you-know-what, the question regarding manufacturers was not who would go under but who would be left, and home values were declining at never before imagined rates. It's a night and day difference today.

As for taxes; outside of the self-employed, taxes have a negligible impact on planned spending. In any case, taxes aren't going to go up significantly enough to impact consumer spending in the short term.