Public News

Print

From Trucking.Com - We've got trucking covered

on .



1/18/2011
Economy, Trucking Looking Up for 2011
By Deborah Lockridge, Editor

A string of economic experts and industry analysts offered a more optimistic look at the economic and trucking industry outlook for 2011 -- albeit with some downsides -- during the annual Heavy Duty Dialogue event put on Monday by the Heavy Duty Manufacturers Association in Las Vegas.

The Great Recession officially ended in June 2009. "But a recession ending doesn't mean the economy is operating anywhere near a normal type of level," said Bill Strauss, chief economist with the Chicago Federal Reserve. "In a technical sense, the words we would use is the economy still stinks."

Actually, when measured by Gross Domestic Product, the economy has been growing at a pretty good clip -- 3.2 percent growth over the last four quarters which is above the trend growth of 2.5 to 2.75 percent. But "it doesn't FEEL like we're doing all that well," Strauss said. The main reason for that, he said, is that rebuilding of inventories accounted for 62 percent of that growth. "This is truly a story of the tail wagging the dog," he said, because inventories represent a fraction of 1 percent of GDP.

Inventories, he explained, are goods that are produced but not sold in the marketplace. If we remove the inventory number from GDP, that's called final sales. Final sales also normally trends to 2.5 to 2.75 percent, but it's only been growing at just over 1 percent. "Here you can see why it hasn't felt so good," he said. But he predicted that number will more closely match GDP growth in 2011 and 2012.

In 2011 and 2012, growth will accelerate somewhat, Strauss said. "But more importantly, it's going to feel better, for two key reasons." Number one, he said, the inventory bullwhip effect is probably coming to an end. Number two, he said, government stimulus is unlikely under the new Congress.

"But even with the pullback in inventory and government spend, we're going to be looking at growth that is going higher," Strauss said. "And that's why it will feel better."

The Fed's forecast is for GDP growth of 3.5 to 4 percent this year and close to 4 percent for the next couple of years. That is more optimistic than the Blue Chip Economic Indicators, a monthly survey of 50 forecasters. That consensus puts GDP growth at 3.3 percent through 2011 and about the same for 2012.

That's less than we've seen coming out of previous deep recessions, pointed out Eric Starks, president of FTR Associates, where 5 to 10 percent was more the norm. "We cannot completely discount history and say it won't be there," he said. "If that happens things get a little crazy."

Unemployment is expected to keep edging down, with the Blue Chip forecast projected for 9.1 percent by the fourth quarter of 2011 and 8.4 percent by the end of 2012.

The Manufacturing-Led Recovery

The one sector of the economy that has been the true growth sector is manufacturing, Strauss said. Manufacturing has been expanding for 18 months - and it has not been slightly above trend, it has been well above trend, growing at a 7.8 percent annual rate. The sector has recovered 56.6 percent of what it lost during the recession, and by second quarter of 2012 should have recovered all of that and will again be looking at record numbers.

Looking at industrial output numbers from December 2007 to June 2009, Strauss noted that the two that fell the most were motor vehicle/parts and primary metals, which kind of go hand in hand. "But much like a tennis ball, the industries that fell the worst are the two sectors that are leading the way" in the recovery. "You're seeing spectacular increases."

The relatively better performance of manufacturing is expected to persist over the next couple of years, Strauss said, although perhaps not quite so drastically. The Blue Chip forecast puts industrial production rising 4.1 percent through 011 and 3.8 percent in 2012. Strauss said he's optimistic it will be even higher.

And, of course, manufacturing is an important figure for trucks, as the services portion of the economy can't exactly be transported on a truck.

Manufacturing was also cited as a strong economic figure by Donald Broughton, partner with Avondale Partners, citing the Institute for Supply Managements's Manufacturing Business Survey, ISM's Purchasing Managers Index was at 57 percent for December. (A PMI reading above 50 percent indicates that the manufacturing economy is generally expanding.)

"I generally don't like confidence indexes because they tend to be squishy," Broughton said. "It's all about feelings. Except purchasing managers. When I ask them how they feel and they say they feel good, it means they're signing POs. So there's a strong correlation with truck tonnage." However, he notes, it's only good for short-term predictions. After a month or two the accuracy drops off.

The capacity question

Much has been made of the issue of capacity coming out of the industry thanks to trucking bankruptcies, truck exports and other factors.

Broughton pointed out that during the previous recession, 11 percent of gross capacity was taken off the road by bankruptcies. But the remaining players added trucks, bringing the next capacity reduction to only 7 percent. By contrast, in this cycle, trucking failures took 12 percent of gross capacity off the road - and the remaining players cut the size of their fleets, bringing the net capacity reduction to 15 percent.

Equipment is not the only factor in capacity, however. Those truck must have drivers in order to haul freight. As Starks said, "the looming driver shortage keeps getting delayed, but it is only a matter of when." The Federal Motor Carrier Safety Administration's new CSA enforcement program and proposed changes to hours of service will have a negative impact on the number of available drivers.

"The most important thing is fleets are not looking to add capacity," Starks said. "They are using current units and searching for more 'desirable' freight." While truck orders are picking up, he said, they are to replace aging equipment, not to enlarge the fleet.

FTR measures "active capacity" - the number of trucks out there actually looking for a load, not the trucks parked against a fleet's fence or on a used truck lot. "We're sitting at about 95 percent utilization of active capacity right now," Starks said. "And as we get into the middle of the year, the system is going to hit 100 percent capacity."

Fleets will be less likely that in the past to just go out and add equipment to expand the fleet, Starks said. Those turcks are just more that can be penalized by CSA. And if you don't have a driver for that truck, you're not going to buy a new truck.

However, Broughton said he doesn't believe that pricing will improve as much as some analysts have predicted as a result of this tightening capacity. Yes, rates will go up, he said, but he thinks predictions of 15 percent or more by the second quarter of 2011 are unrealistic.

And margins will be flat despite higher rates, Broughton said, because utilization is going down thanks to the government's new CSA program and proposed changes in hours of service, but costs are going up for fuel, labor, equipment and more.

Starks responded in a later presentation to Broughton's comment, saying FTR expcts to see a 10 to 15 percent increase in rates. "Does that mean that's all profit? No! We're going to see costs go up 10 percent or more, so their profit margins are going to continue to get squeezed."

Starks also pointed out that freight is the most important indicator to be watching in order to understand the recovery. "What we've seen is that freight had flattened out over the last six to nine months, but we see things are going to start picking back up." In fact, Starks predicts a 3.5 to 5 percent growth in freight over the next several years, which is significantly higher than the usual rate of around 2 percent. However, it will still take a lot of growth after such a large downturn to get us back to the peak freight levels we saw in 2006, he said.

Finding Drivers

One of the most critical factors for trucking companies in 2011 and 2012 will be the ability to find drivers and owner-operators, Broughton said. "That will be the single biggest differentiating factor between trucking company A and trucking company B," he said.

Starks said the hours of service changes could result in a productivity drop of as much as 6 percent. "That means we would need another 150,000 trucks on the road overnight to move the same amount of freight."

Between the new regulations and a pipeline issue - the ability for trucking companies to actually bring people in, hire them and put them in a truck - the industry could be facing a peak shortage of 600,000 drivers.

"Let's say fleets increase their productivity, so the driver shortage gets down to 400,000 - that's twice as bad as what we saw in 2004."
In order to deal with it, Starks predicts we could see more drop and hook freight and increase in demand for trailers as trucking companies try to keep their tractors as productive as possible despite reduced driver hours and drivers available.

Broughton said he likes to follow over-the-road truck driver pay as a predictor of unemployment. That's because there is a part of the economy that views driving a truck as a last resort. "So when I talk to trucking companies and they say their recruiting department is finding plenty of great drivers, I sell all my truck stock and get into a fetal position in the corner of the room, because that the plant went from three shifts to two, or it means the construction job finished and there wasn't another one to go to."

On the other hand, he said, when you have to start paying more for drivers, it means unemployment is going to start coming down. "As long as truck driver pay is going up, I'm confident unemployment will keep going down."

Buying Trucks

"Things are definitely turning around in the Class 8 market," Starks said. FTR predicts 201,000 in truck production for 2011 and 258,000 for 2012. Trailer orders are accelerating, as well, and FTR has upped its forecast over the last several months to reflect higher order activity they're seeing. Their current forecast is 170,000 trailers this year and 220,000 for 2012.



Print

California delays diesel emission rules till 2014

on .

Find more articles at Fresnobee.com
By Rick Daysog - This email address is being protected from spambots. You need JavaScript enabled to view it.

The state's construction and trucking industries will get more time to comply with stringent new diesel emissions regulations.

Citing the sluggish economy, the California Air Resources Board on Friday voted unanimously to push back the implementation of the new rules by four years to 2014.

"What the board was trying to do today is to balance the needs of our citizens for cleaner air … and to come up with something that provided meaningful relief to an industry that has been hard hit," said Mary Nichols, the board's chairwoman.

The rules require businesses to retrofit existing trucks, bulldozers, front loaders and other heavy equipment to lower diesel emissions.

The delay was opposed by environmental groups and clean-tech advocates, but the trucking and building industries applauded the board's decision.

Michael Kennedy, general counsel for the Associated General Contractors of America, said... Read more
Print

ATA recently launched www.SafeDriverHours.com

on .

From:  Dave Osiecki,  Sr VP of Policy & Regulatory Affairs, American Truckig Assoications

HOS Coalition Members:

I’m pleased to inform you that ATA recently launched www.SafeDriverHours.com – a new website designed to serve two purposes.

First, the new site is intended to educate the press and the public on the remarkable highway safety performance of the trucking industry over the last seven years—the same period trucking has operated under the revised HOS rules. The site includes safety facts and statistics, much of it in easy to read charts and graphs, showing the industry’s dramatic safety improvement since 2004 when the revised HOS rules first became effective.

The second purpose of the site is to provide easy-to-use tools and resources for the trucking and transportation industries (i.e., drivers, carriers, shippers, etc.) to help the industry actively engage in the upcoming HOS rulemaking process. In the face of trucking’s remarkable safety progress since 2004, the Obama Administration will be proposing politically-motivated changes to the HOS rules that will in some way reduce driver and industry productivity. Details of the Obama Administration’s proposed changes will be uploaded on www.SafeDriverHours.com shortly after they become available – which should be in the next few weeks. The Obama Administration proposal might be made public just in time for the holiday – this Administration’s attempt to put some coal in the industry’s stockings.

I encourage you to check out www.SafeDriverHours.com, and bookmark it for future use. ATA will be leading the industry’s campaign to retain the current and safe HOS rules, and this new website will be one of ATA’s primary tools to support the campaign.  Stay tuned!

Dave O.

Dave Osiecki
ATA Sr VP of Policy & Regulatory Affairs


Print

FMCSA Aims to Publish Revised HOS Rule, EOBR Mandate Before Jan. 1, Ferro Says

on .

TRANSPORT TOPICS - December 6, 2010
By Sean McNally
Senior Reporter

WASHINGTON — The Federal Motor Carrier Safety Administration now aims to publish its revisions to the hours-of-service rule and a proposed expansion of its electronic data recorder requirement by the end of the year, the agency’s head said last week.

FMCSA Administrator Anne Ferro said the HOS rule, which was expected to be published near the end of October but remains under review by the White House Office of Management and Budget, is one of several agenda items the agency plans to complete before the end of 2010... Continue to read more... (subscription may required at TTnews.com)

Print

Group Encourages Women Truck Drivers

on .

River Falls Journal

Wisconsin News - A Wisconsin group is trying to get more women to pursue trucking as a career.

A Wisconsin group is trying to get more women to pursue trucking as a career. Ellen Voie of the Women in Trucking Association says females make up less than 5% of what she calls a very male-dominated environment on the road.

She says men also dominate other parts of the industry, including leadership and office roles. Voie’s group is based in Plover.

It works with manufacturers on ways that trucks could better accommodate women. And the group works with travel centers to understand the needs of female truck drivers.

Voie said the industry is becoming more female friendly, but it’s got a long way... Continue to read more on River Falls Journal...

Print

High-paying jobs found in trucking industry

on .


 


HOUSTON (KTRK) -- Day after day and night after night, stories of unemployment and the bad economy dominate headlines. This story is not one of them. There's an industry where employers can't find enough people to hire for high-paying jobs.

Tristan Worell is searching for the right path, and he hopes he's found it behind the wheel of a truck.

"Going over the road, exploring different states, cities," Worell said.

It's not been an easy road for Worrell, who went straight out of college and straight into unemployment.

"I'm 24 years old; it's pretty tough," he said. "I came out expecting... Continue to read more...

Print

ATA Inducts First Woman Chairman

on .

 




TruckingInfo.Com

10/21/2010
ATA Inducts First Woman Chairman

The American Trucking Associations this week inducted its first female chairman. Barbara Windsor is president and CEO of Hahn Transportation, New Market, Md., a specialized regional trucking firm that hauls refined petroleum and construction materials throughout the Mid-Atlantic corridor.


Back in 1933, during Great Depression, a Maryland farmer and his wife made the decision to give up farming. They moved to the nearby town with their two young daughters and started trucking. That man, James Russell Hahn, was Windsor's grandfather.


"Early on he knew how essential trucking was to everyone, especially the Maryland farmers - moving the crops from the fields to the canneries, the milk from the farm to the creameries, the coal or oil to the homes, schools and hospitals for heat," Windsor recalled during her induction ceremony.


James Hahn went on to become a chairman of the Maryland Motor Truck Association in 1967. His daughter, Rebecca Hahn Windsor, would become the first female chairman of MMTA in 1988.


In 1997, Barbara Windsor became the second female chairman of MMTA, following her mother. She is also active in the National Tank Truck Carriers.


Both of her parents, Rebecca Hahn Windsor and Robert Windsor, now retired, were very active in the day to day operations of the business. While trucking was in the family's roots, her parents always encouraged her to pursue her own dreams.


Windsor took her parents' message to heart. Prior to joining them at Hahn in 1991, she lived in Kansas City where she was employed by Trans World Airlines for 20 years. But she kept up with the family business.


"I really wish my grandfather could be here to see his granddaughter very proudly and humbly accept the chairmanship of this great organization that he believed in and supported for many years. His legacy lives on."