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Is it that bad?
According to this article it seems pretty bad. I know as a company driver I have been doing a lot of sitting. Would like to hear how you guys are doing or any other insight you might have into the following article. Was thinking of getting a truck in a month or so but I think I might wait.
FEATURE-US truckers grim as freight slows, future clouds
Mon Apr 9, 2007 3:27 PM ET
(Paragraph 18 contains language that may be offensive to some readers.)
By Nick Carey
DAVENPORT, Iowa, April 9 (Reuters) - Every hour that truck-driving team Barbara and Robert Skeel sit around waiting for a load to haul, they're losing money.
"Business is pretty bad," said Barbara, the more vocal half of this man-and-wife team, while killing time at the Flying J truck stop in eastern Iowa. "Not just for us. Everyone is feeling the pressure right now."
The Skeels -- a driving team for more than 20 years -- hire out their truck to a company that contracts for FedEx Corp. <FDX> express freight unit FedEx Custom Critical that specializes in time-sensitive freight. Driving teams are ideal for moving goods quickly as they can alternate at the wheel without stopping to rest as single drivers must do by law.
After waiting for nearly 48 hours, the Skeels were finally told they would get a load heading to Florida, where they live.
"We've been stuck here making no money," Robert said glumly, a lit cigarette hanging precariously from his lip.
Interviews with other truckers in Iowa, along Interstate 80 -- a major commercial artery stretching 2,900 miles coast to coast from downtown San Francisco to the suburbs of New York -- paint a gloomy picture of weak freight volumes and pricing pressures reflecting the slowdown in the U.S. trucking sector.
Weighed down by the woes of the domestic auto makers in Detroit and the U.S. housing market, the truck companies and analysts say a recovery may come sometime this year, later than originally hoped, but no one knows for sure.
"We're in no-man's land," said Morgan Keegan analyst Art Hatfield, who covers the sector. "The economy doesn't seem to be worsening, but so far we haven't seen much sign of improvement either."
Meanwhile, driver Doug Raines, 41, a St. Louis-based independent contractor, who like the Skeels owns his own truck that he hires out, says simply: "Business is bad."
"There are too many trucks out there at the moment chasing too little business," said Raines, heading West with a load of beer. "I've had to turn down some business because the price was so low I would have lost money."
UNCERTAIN PROSPECTS
The first quarter is always a slow one for the U.S. trucking industry, with January and February particularly quiet after the fourth-quarter peak shopping season culminating at the end of December.
The 2006 peak season never came, as retailers kept inventories low amid lackluster holiday consumer spending leading to disappointing results for publicly-traded truckers.
This has left trucking companies keeping a keen eye out for signs that U.S. economic growth will pick up again. Although truck freight volumes improved in March, analysts said expectations for first-quarter results are quite low and doubt the trucking industry's hopes of a second-quarter recovery will be realized.
"The economic data that we've had so far this year reinforces a more pessimistic view," said Kevin Kirkeby, an equity research analyst at Standard & Poor's. "The recovery seems to be getting pushed further out."
Kirkeby said Standard & Poor's still expects to see the trucking sector pick up in the second half of the year as U.S. economic growth picks up.
At the Flying J truck stop, Wesley Wiley, a 14-year veteran who drives for St. Cloud Minnesota-based Anderson Trucking Service Inc., is waiting to haul a large Deere & Co. <DE> bulldozer to Missouri.
Business improved in March, he says, but he's worried.
"In a market like this, I have to stay a step ahead of the game," said Wiley, 38, from Winfield, Louisiana. "I'm hauling ass and dropping as many loads as I can to make a living."
Another driver, who declined to give his name but said he had 30 years of experience and was hauling goods for Swift Transportation Co. Inc. <SWFT>, predicts the worst is yet to come.
"It's getting harder to get a decent rate per mile," he said. "When April's this bad, the summer will be worse."
Most truckers get paid by the mile, meaning the majority of conversations with truckers focus on that rate.
Dan Skubiz, a senior equity analyst at St. Louis-based Missouri Valley Partners, which manages assets of close to $2 billion and holds a number of transport stocks, said it is difficult to tell what the future holds for truckers in the near-term.
"The big question I am hearing in the trucking industry right now is: How is this all going to play out?" he said.
"And the concern is that maybe the second half (of 2007) isn't going to be as good as people hope," Skubiz added.
That uncertainty also raises the question of when to invest in trucking stocks. Typically, industry analysts recommend getting in at the bottom of a cycle and benefiting as business booms.
"But nobody really knows for sure where the bottom is at this point," Skubiz said. "It's hard to read the tea leaves."
For truckers, including teams like the Skeels, that uncertainty is much closer to home.
"Things may get harder for a while," Barbara Skeel said, staring pensively out the window of the Flying J at an overcast Iowa sky.
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