Trucking Shipments Drop

[Anonymous]

There is always a slow time between November and Feburary.

I believe it was very good to run very hard between March to about October, making as much as you can and living on very little to mass enough funds to sit at home and rest for the winter while the storms and holidays swept the nation.

Most of the time if it is "Chain Time" it's home time anyhow. Ask me again when Im struggling up a Pennsy Coal road that is 12% in 2 feet of the stuff.

The holidays are always murder on cargo, you learn fast what is essential and what can wait until after the holidays. Ultimately I stayed with Food Products and Reefer Related work as a husband-wife team in my last months on the road. Everyone needs to eat all over the USA and there are cargo that requires protection and extremly JIT. (Just in time) Dry vans tend to get the worst end of the stick at times. Flats do better as does containers.

I dont have the stomach or the brain for those high dollar and percentages. I never was any good at math and anything related to high places such as board rooms at the tops of the trucking ivory towers are always allergic to me. The suits can add and subtract profits well enough and know how things are going long before we grubby drivers understand anything other than what we ran last week and what we are running this week in terms of miles.

But if you are going to take one thing and remember about trucking, Remeber this:

"Stop the food, fuel and essential trucking; you stop the USA." Period.

Now I started way back when warehousing and LTL was king and labor (Strength and durability) was worth alot to a employer or customer. Today, it seems that dry vans are treated as mobile warehouses with very little regard to the driver's next load that might be scheduled to be picked up later that day for a totally different account. They rot in the dock until the forklift is finally finished with the boss's work and then can get to the extra inbound stuff for tomorrow's work. (Demurrage used to take care of that. Whisper the "D" word and you got unloaded within 10 minutes)

I also think that UPS, FED EX and others bit off more than they can chew. I recall them as small packages and very important papers that just must be somewhere else tomorrow morning. Back in those days the US Postal Office is too slow and trucking too expensive. Now I see UPS and others doing the same work that dry vans (with teams no less) doing the same work while consolidating the stuff in several mega facilities like Louisville Ky.

It is scary when everything that moves in the USA has to go thru Louisville. (Seems like it)

So they have trailer problems? Big deal. They should have someone who knows trailers and just have that person or office focus on keeping trailers loaded and rolling (Buying new ones as needed) and leave it be. Too many higher ups messing with the kitchen cook's trailer soup in a effort to maximize profits. One company's 4000 trailer problem can be just as bad as one small company with 10 trucks, two of which need oil changes this week.

The situation with trucking will only thin out until only the strongest and richest survive. The rest will die of starvation and organ failure due to lack of nutrition (Money, Equiptment and good Labor)

It has always been this way since everyone started trucking companies after world war two and will always continue until someone falls out of bed and thinks of a better way to move cargo in the USA. With everything fleeing overseas in search of better profits and no work to be found here except for a few workshops and several cold storages little wonder we can find any cargo to run.

Other than food, beer and logs, things that cannot be outsouced to India or China.

As a parting shot I bet the one loaded trailer I dropped off at the Kmart Distribution Center in one particular part of PA near Philadelpha is still rotting in the weeds fully loaded and neglected while regional kmarts fight the Monster Wally World across the street.

[ouengr]

I understand that trucking volumes may be down but there could be more reasons than an economic slowdown. 

1. Many of the items that I bought this years were more expensive but smaller.  A truckload of Kitchenaide mixers is worth much more than a truckload of toilet paper.  It may well be that the items sold this year had a higher dollar density than in years past.

2. Due to higher fuel and labor priced, merchants are working harder to cube out trailers.  I know in the past that I have heard of trailers being 'full' because the floor space was occupied but 2' feet above the floor the box was empty.  The load was no where near maxing out the weight either.  The sustained high fuel prices have forced shippers to fnd a way to improve efficiency.  

3. Due to problems in past years, many stores brought in their inventory early.  Stores do not want to get caught in mid December with their inventory stuck away from their stores due to weather or other problems.  Many of the local merchants here rent domestic shipping containers and use them for overflow storage in their parking lots during the Christmas shopping season.

It seems to me contradictory that the stores will claim around a 'dissappoiting' 6.5% increase in sales YTY and then the trucking industry claim that their loads are down.  A 6.5% increase in sales YTY is a healthy rate of growth and should please corporate execs around the nation. 

 

[greyhounds]

From what I heard (and I'm not sure this is true, I hope to get confirmation from a supervisor soon), a certain supervisor on day shift told the undercoating guys not to undercoat the trailers.  Being that UPS is one of our larger customers, this could hurt us in negotiations for this coming years' order, but I'm not sure if it will affect us yet.

As far as I'm aware, we should be okay on production for a while, if nothing else, we build stock trailers for the lots until new orders come in.  If it gets real bad, we might eliminate second shift, but we'll wait and see.

The bigwigs have spent a few million on the inside reconfiguring the plant, we now have half the lines we used to (two instead of four), but can put out almost the same output in a shift.  I do believe we are the only plant that is set up for the custom work (side doors, drop-frame trailers, and other custom stuff), as well as the UPS trailers.  We now slide all the trailers sideways on air pallets on the floors, as well as build the box first, then jacking it up to add the suspension and landing gear.  Quite the facility. 

So, were you there when Stoughton built the RoadRailers?

[rvos1979]

What happened with the recall?  Ouch that has to hurt.

What kinda backlog do you guys have?  I think at some point there could be some serious cancellations of trailers.

Been a few years since I have been up to your plant...I am sure things have changed quite a bit.

ed

From what I heard (and I'm not sure this is true, I hope to get confirmation from a supervisor soon), a certain supervisor on day shift told the undercoating guys not to undercoat the trailers.  Being that UPS is one of our larger customers, this could hurt us in negotiations for this coming years' order, but I'm not sure if it will affect us yet.

As far as I'm aware, we should be okay on production for a while, if nothing else, we build stock trailers for the lots until new orders come in.  If it gets real bad, we might eliminate second shift, but we'll wait and see.

The bigwigs have spent a few million on the inside reconfiguring the plant, we now have half the lines we used to (two instead of four), but can put out almost the same output in a shift.  I do believe we are the only plant that is set up for the custom work (side doors, drop-frame trailers, and other custom stuff), as well as the UPS trailers.  We now slide all the trailers sideways on air pallets on the floors, as well as build the box first, then jacking it up to add the suspension and landing gear.  Quite the facility. 

[Doublestack]

The late Dec slow down is normal, but that ATA data is November and as you point out, the year over year decline is troublesome.   THe intermodal rush for the fall was pretty flat for all parties concerned including many of the truckload providers and the western RR's.   You're seeing many in that arena lowering earnings estimates for the 4th qtr based on overall softness. 

 I had posted before that some of the domestic truckload guys were ground-stacking domestic containers by early Dec.   That's a bad sign.  

[MP173]

What happened with the recall?  Ouch that has to hurt.

What kinda backlog do you guys have?  I think at some point there could be some serious cancellations of trailers.

Been a few years since I have been up to your plant...I am sure things have changed quite a bit.

ed

[rvos1979]

I agree with Ed on the drop in business in the trucking field.  There have been rumblings around Stoughton Trailer that we may be dropping production this year, due to a decline in orders.  We have yet to hear from UPS and FedEx on what they want for this coming year, as these two companies are our best customers.  I suspect that with the supposed recall of approximately 4,000 UPS trailers due to lack of undercoating, we may not get much from UPS this year.  We will probably have a better understanding in January at the biannual progress meeting.

[MP173]

It is slowing down in the trucking industry.  That is normal for this time of year. 

What is not normal is the YTY drop.  That indicates there is a general slowing down of the economy, which is what we have seen for the past 2-3 months.  The trailer and tractor industry have been building at capacity for several years now.  Part of the tractor production was based on the new engine requirements for 2007.  Trucking companies accelerated their tractor purchases.

My trucking industry contacts have been a bit on the sour side the past month or so.  All are saying the same..."things are really slow now."

If the truckers are slowing down now, the general economy has already slowed and the rails will see the same soon.

 

ed

[beaulieu]

 

From the Akron Beacon Journal.... 

Trucking shipments drop; data may hint at slowdown

Associated Press

WASHINGTON - In a potentially worrisome sign for the U.S. economy, trucking shipments declined by almost 9 percent in November -- the largest year-over-year decrease in almost six years, the industry's largest trade association said.

The American Trucking Associations said in a monthly report that its seasonally adjusted truck tonnage index stands at its lowest level since late 2003 after an 8.8 percent decline from the same month a year earlier. The index fell 3.6 percent from October.

Because more than two-thirds of all manufactured and retail goods in the country are carried by truck, the industry is considered an economic bellwether.

 

Does anyone know when data for the same period will be available for the RR's? 

 

Here are some recent AAR statistics, all changes are year over year.

 

Week ending Nov. 11th      Intermodal     Containers up 3.3%  TOFC down 13.3 Overall down 1.1%

                                           Carload  down 2.1%

 

Week ending Dec. 1st          Intermodal   Containers up 6.1 %  TOFC down 10.4% Overall up 1.6%

                                             Carload up 3.5%

 

John Beaulieu 

[Datafever]

While I understand that this is usually a slow time for the trucking industry, the 8.8% decline is a year-over-year (YoY) figure.  In other words, there has been an 8.8% decline in trucking tonnage when November of 2006 is compared to November of 2005.

I'm not sure that the price of diesel can account for all of that drop.  If a shipper needs product delivered, the incremental cost of diesel won't stop anything.  Or if it does, the shipper goes out of business eventually due to not getting product shipped.  Which would indicate that the economy is slowing down.  A lot.

[vsmith]

Diesel fuel prices averaging $2.50 nationwide, $2.80 here, 30% more than this time last year, along with pretty narrow profit margins, may be forcing some truckers into other lines of work.

[zapp]

I know Railway Age, every month, reports on the individual railroads and industry as a whole, carloadings, profits,etc.

Generally speaking, this is the slow time of year for most industries. There alot of industries that will close plants to do audits or retooling now.

[samfp1943]

Maybe some of the former drivers, and forum members can confirm this, in my twenty plus years in the trucking industry; there was always a slow down between Christmas and about the first of March. The week between Christmas and New Years was dead, and momentum was slowly rebuilt back, to about the first of March.

[JSGreen]

 

From the Akron Beacon Journal.... 

Trucking shipments drop; data may hint at slowdown

Associated Press

WASHINGTON - In a potentially worrisome sign for the U.S. economy, trucking shipments declined by almost 9 percent in November -- the largest year-over-year decrease in almost six years, the industry's largest trade association said.

The American Trucking Associations said in a monthly report that its seasonally adjusted truck tonnage index stands at its lowest level since late 2003 after an 8.8 percent decline from the same month a year earlier. The index fell 3.6 percent from October.

Because more than two-thirds of all manufactured and retail goods in the country are carried by truck, the industry is considered an economic bellwether.

 

Does anyone know when data for the same period will be available for the RR's?