[Mandilon]

How will trucking fare in relation to a crashing housing industry?

Which industry does trucking 'follow?'

THX & God Bless

[Professor427]

Trucking directly reflects all parts of the economy, hence the old saying 'if you got it, a truck brought it'. If there's any short of economic slowdown, there will be a slow down in freight being shipped. Certain specialities may not be affected (I'll let the drivers who haul those comment instead of me) but if the sub-prime mess dumps the DOW, you can bet there'll be less freight to haul.

[no_worries]

While trucking in general does not follow any particular industry, many industries have an effect. Housing and auto are probably the two industries that are felt the most in terms of freight. Freight has been in a downward trend in trucking since last Fall. Rail freight has also been falling all year. The economy as a whole has slowed but not as fast as freight has. This means that some segment of the economy is causing a significant drag on freight and that segment is housing. Softwood markets have softened considerably. Sales numbers have been off for Home Depot and Lowes going back to the 4th quarter. Even retailers like JC Penney and Wal-mart have noted that Home department sales have been off, even when other areas are doing well. We haul refrigerated freight so you wouldn't think it would affect us much. But I do know that nurseries are dealing with significantly slower sales. Especially those that cater mostly to new home developers.

And the home market isn't all we've got to worry about. It looks like the auto industry is headed for a major slowdown. While the Big Three's troubles are well-known, the most recent numbers show that several of the Japanese auto makers just had lackluster sales results. This will be the first year since the Great Depression that housing values nationwide will actually decline. The economy has been supported primarily by consumer spending during the last several years, which in turn has been spurred by skyrocketing equity and the loose credit it inspired. As home values, and consequently equity, decline the credit markets will tighten considerably and reign in consumer spending. The economy will slow considerably. I predict we slip into recession in the first half of next year.

So yes, housing has affected freight and due to it's continued effects, both direct and indirect, on the economy, we will continue to deal with the fallout for awhile. I'm looking for a soft freight environment through next year at least.

[SoCal79]

I have a dumptruck,all of my jobs are new home construction related. Now is one of those times where there are too many trucks not enough work,the weak/non hackers drop off and only the strong survive! Work kind of tapered off a few months ago then at the beginning of August it came to a screeching halt.

Originally Posted by SoCal79

I have a dumptruck,all of my jobs are new home construction related. Now is one of those times where there are too many trucks not enough work,the weak/non hackers drop off and only the strong survive! Work kind of tapered off a few months ago then at the beginning of August it came to a screeching halt.

Agreed! Its tough for even the strong to survive right now. I sold my truck 2 months ago because I could see the "season" was never going to par up, its now almost the end of Aug. and guess what, its getting even slower when things should be rocking and rolling. I have many friends barely getting by, and I worry greatly for them.

:sad:

I wouldn't say I'm weak for making my decision to bail, I made a 30k profit on my rig when I sold it. My truck was working almost daily, but I wasn't happy with the profit #'s at the end of the month (10k gross checks), so it wasn't worth it for me to continue.

[Mandilon]

floored,

I've heard many 'dirt haulers' from the LA area claiming that Texas could accommodate them.

Trucking I-130 is underway in Austin Texas (looping Austin) to San Antonio estimated to be a 4 to 5 year project.

Have you heard of anyone heading for Texas?

I love challenges. Maybe this is the perfect time to jump into the trucking industry.

Take care all.

[Dispatch_This]

The AP is reporting today that new home sales were up by 2.8% for July, in spite of tighter credit. Also, factory orders for durable goods were up 5.9%. I was thinking that the upcoming 4th. quarter would be pretty dismal - not so sure now!

[BanditsCousin]

Household goods is down 20% over last summer. When new houses (and even used ones aren't selling), people arent moving, and the bedbuggers whine and whine more and start stooopid shutdowns :lol:

[no_worries]

New home sales numbers are notoriously misleading in the current environment. The reason is that a sale is recorded when a contract is signed. Therefore, those numbers don't take cancellations into consideration. The major homebuilders have been running 25%-40% cancellation rates. The same thing happens with the pricing. I believe new home prices rose 0.6% last month. That's great except anyone that's looked at the new home market knows that builders are offering unbelievable incentives, sometimes as much as $100,000. The recorded sales price does not reflect these discounts and therefore is inflated.

Durable goods orders are up because inventories have declined. This is normal ebb and flow and corresponds to consumer spending. The consumer is still spending and as long as that continues the economy will be ok. One thing to keep in mind is that, even though it's been talked about for awhile, there was really no concrete evidence of the impending credit crunch. The first major signs occurred just in the last 10 days or so and the central banks stepped in right away and put a band-aid on it. There are two camps, those that think this was only a hiccup and everything will be fine and those that think we're entering a true credit crunch that will have to play out. If it's the latter, it bodes poorly for the consumer. As goes the consumer so goes the economy.

[solo379]

First of all, i wouldn't call it a "Crash", just readjustment.