With the majority of the country”s products hauled by truck, the trucking industry is a pretty good indicator of economic times.
In the past year, freight volume has increased for those trucks still on the road. But local truckers attribute the increase more to the closure of several trucking companies during the recession than to a rebounding economy.
“During the downturn in this recessionary period we had, a lot of trucking companies have gone out of business — large trucking companies and small trucking companies,” said Ralph Youngblood, owner of Johnson Truck Leasing and Twin River Transportation in Columbus.
As a result, “we”re more evenly matched with equipment and freight,” Youngblood said, noting he has seen increased freight volumes in the past year.
“It got pretty slow in ”09; ”10 seems to be back to normal, maybe a little better than normal,” said Elmer Thomas, owner of Vernon Milling Company in Vernon, Ala. “There”s a shortage of truckers. A lot of them have gone out of business, so the ones of us that are left, are doing pretty well.”
Prior to the increase, Youngblood, who has been in business since 1979, was able to stay afloat with his truck- and trailer-leasing business.
Twin River has 18 trucks in its fleet and three owner-operators (who own their own trucks but haul for the company); its primary customer is GNF, a petroleum company.
Business at Vernon Milling Company has picked up within the last six to seven months, said Thomas. The company has been in business since 1938; Thomas has been there since 1963.
“Our customers are getting more business, so when they get more business, we get more business, too,” Thomas said.
Vernon Milling Company has a fleet of 73 trucks, hauling for such companies as Cargill, producer and marketer of food, agricultural and industrial products; 3M, a technology company whose primary brands include Scotch, Post-It and NexCare; BASF chemical company; and Cal-Maine Foods, the largest producer and distributor of fresh shell eggs.
“We”ve just had a better customer base and probably a little more assets to fall back on in hard times,” Elmore said of how the company thrived during the downturn.
Doug Estes, owner of Volume Freight in Columbus, has seen a slight increase in freight, but his volumes remain about 25-30 percent off.
“Here in the last year and a half, two years, it”s the worst I”ve ever seen it,” said Estes, who has been in business since 1998, running 24 trucks and hauling “a bit of everything.”
About a year-and-a-half ago is also when CFC Transportation shut down its fleet, focusing on its Bulldog Sand and Gravel business at the Columbus-Lowndes County Port.
With 17 years of trucking under his belt, CFC Transportation owner Bubba Comer, knows the ups and downs of the industry.
“When things are going good, the truckers are the first ones to feel good,” said Comer. “When things re going bad, they”re the first ones to feel it.”
Now, Comer has about 12 trucks; currently, their only use is for his own product. In the past, Comer has had as many as 60 trucks on the road, but when gas prices went up and rates went down, he parked his fleet.
“I took them off the road when the fuel was $4.68 a gallon, and your freight was declining,” Comer said, noting when fuel costs go up, shippers shop around for truckers, and the rates tend to decease. Insurance premiums also were up, costing him about $4,200 per unit; now, units are about $3,000, he said.
With diesel fuel at about $2.80 a gallon, “you”re probably averaging $1.25 to $1.40 per mile in operating costs,” including fuel costs, driver payment, maintenance and insurance, Comer added. “It doesn”t leave very much to pay bills.”
Companies delay purchases
Many of those trucking companies staying on the road are delaying new-truck purchases. Waters Truck and Tractor in Columbus sells International trucks and has a full-service repair department and body shop.
Despite national increases in new-truck purchases, Waters hasn”t seen increased sales, said president Mike Waters. But the services side of the business has seen an increase, as truckers try to maintain their current equipment.
“The truck (sales) on an increase in a national scale, that”s nothing that”s being seen locally,” said Waters.
According to the ACT Research Group, new orders for mid- and large-size trucks was up 16.8 percent in August compared to August 2009, Transport Topics reported.
“But that”s comparing numbers to 2009, the worst sales year in a generation,” said Waters, who noted sales were at a 47-year low in 2009.
Larger companies like Vernon Milling have continued their normal purchase cycle.
“We replace about 14 to 18 trucks a year, and that hasn”t changed,” said Thomas.
The American Trucking Association estimates 68-70 percent of the nation”s freight is moved by truck.
And while economists might view increased freight volume and truck sales as an economic indicator, Comer doesn”t see himself getting back into the commercial trucking business. He”ll continue to truck for himself and explore other business options.
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