Posted on 01/23/2013 11:24:27 AM PST by blam
Truckers Knew We Were In A Once-In-A-Generation Recession Before Anyone Else
Rob Wile
January 18, 2013, 11:29 AM
Youtube
If you ever wondered what industry is the American' economy's most accurate bellwether, here's some pretty good evidence that it might be trucking.
In the just-released minutes of the Federal Open Market Committee's December 11, 2007 meeting, then-St. Louis Fed Governor William Poole recounted what he was hearing from his nonfinancial business contacts about orders and sales.
Most reported softening activity, but nothing dire.
But not Poole's trucker.
From the December 2007 transcript:
UPS is expecting a peak season that is milder than in the previous years; my contact believes that the economy is not going into a negative but is clearly slowing down. The company is leasing eleven fewer aircraft this year. To meet the peak, they always lease extra planes for shipping. They are probably holding about steady on capital outlays.
My contact at FedEx says that the outlook is very soft, not much buildup toward the holiday peak.
The retailers that they talked to are anticipating a softer season, not an absolute decline, but slow growth. International business remains very strong. This company is reducing capital expenditures by 10 percent from its previous expectation.
My contact in a major company in the trucking industry says that we are in a recession, the worst he has seen in twenty to forty years. The company is reducing its fleet size by 10 percent, is cutting capital spending quite substantially, and has no good news.
This all the more incredible given the NBER later determined December 2007 was the month when the Great Recession began.
(Excerpt) Read more at businessinsider.com ...
Who is lying?
Give those truckers ‘Obama’ phones and EBT cards!
But, like many I like to listen to peoples investment key indicators and theories.
I met a guy @ the better half's employer's luncheon.
Said gent noted his key for in and out of the market(s) were the (I'll assume going forward orders) orders and revenues of the various truck manufacturers at the time and he always seemed to be out before a downturn. I'd need to really study this pet theory, but like many they are food for thought...
It’s not a bad idea to keep an eye on cardboard production and box manufacturing.
You can watch the Big Tanker stocks....too. TNP, DHT, TK, GASS, VLCCF.....etc.
It makes perfect sense that truckers would know first, since they are the part of logistics which is closest to end consumers. Container shipping works on a 9-12 month lead time from factory orders to shipments, but a trucker going from a WalMart distribution center to a store would know what the economy is doing in that town on a daily basis, based on how full the truck is that day.
Old trick....and it works.
Blam,
I deal with small to medium size trucking companies everyday. They all are trying to find drives and they all are adding trucks to their fleets. At $150K a pop(for a tractor), they do not do this without some forethought. The biggest problem they all tell me about is the inability to find qualified CDL drivers that can pass a drug test and therefore able to insure them. Starting pay for most of these companies is $45K/year.
In addition to my own personal experience, I have heard both McClain and Central Oregon Trucking commercials on the radio advertising for drivers and offering a signing bonus.
We are coming out of the recession. Housing starts and permits are steadily increasing. Existing home sales are steadily growing and inventories are 4 months or less. Unemployment is slowly going down.
We may not like Obama or his policies but I can assure you that all of the above statements are fact and point to an improving economy not the opposite.
Thanks for the link. He’s right on.
There’s a sign not far from my house advertising for CDL tanker truck drivers.
Obama would say, look at all the money we are saving with less road crews to repair the damage by the trucks.
Rail car activity is also a tell tale sign. As an FYI UPS puts a ton of their ground packages on rail.
My brother is a trucker. He’s shared many of these concerns.
He’s gone from having a fleet of a dozen trucks and 20 employees to only himself, his wife, and his son.
Too bad too, he was a good employer and took care of his people. Guess it’s up to the president to do that now
I remember truck orders going down before the recession.
Eventually pent up demand will pull the economy out of the doldrums. People can’t defer everything for ever. Strange recession this has been. The employed, the threatened and the jobless and the takers. The two bookends, employed and the takers, just seem to have carried on.
How many shifts is Navistar working now?
In addition to my own personal experience, I have heard both McClain and Central Oregon Trucking commercials on the radio advertising for drivers and offering a signing bonus.
We are coming out of the recession. Housing starts and permits are steadily increasing. Existing home sales are steadily growing and inventories are 4 months or less. Unemployment is slowly going down.
We may not like Obama or his policies but I can assure you that all of the above statements are fact and point to an improving economy not the opposite.
I disagree with this industry analysis. I own and operate a transportation consulting firm as well as operate my own fleet. Yes, qualified drivers are in demand, but not because of the amount of available tonnage. The tonnage that is moving is not worth hauling, as it is barely covering expenses. My P&L makes this a fact.
Sure, we are continually bombarded by the $45k / first year with sign on bonus ads. Do a quick google search and find out about the performance and intents of the companies that are doing this advertising. PAM, Swift, Landstar, Prime and others all have the same racket. These sign on drivers rarely make $20k and quit before qualifying for their "bonus" - it's a numbers game, churn and burn.
I have reduced my fleet by 50% as well as seen a lot of my clients undertake actions that reduces their capacity. I'm within 2 miles of the largest trucking companies in the U.S., and the industry is in turmoil because of reduced demand.
You are correct. Guess what is happening to rail volume? Same as OTR LTL volumes!!!
The trucking companies I deal with are mostly flatbed heavy haulers of lumber, plywood and other commodities out in the Pacific Northwest. They typically are not reefer(refridgerated) haulers. Their business has been increasing for the last three years. At first they brought back equipment that had been mothballed. Now they are buying new equipment.
As I stated in my previous post, the biggest problem is trying to hire qualified drivers. Being a long haul trucker is a very difficult job. My dad was an owner operator tanker driver. Long hours and phyiscally exhausting and sometimes days away from home and family. Flatbeds are even harder because you may be required to tarp the load, especially in the winter. That means climbing up on the flatbed and the product on the trailer and straping down a 50 x 20 full tarp. Sometimes drivers fall off and get hurt.
You need to have a clean driving record to get insurance coverage. The more dangerous commodity you are hauling the higher the insurance and pay. My dad hauled everything from rocket propellant, acids, blue indigo dye, palmolive dish soap to liquified sugar. He frequented places like Hooker and Dow Chemical, WR Grace and an air base in Alabama, where they built missiles. Of course he died of cancer.
By the time trucking stats start heading south it is too late.
Cardboard orders, used for all sorts of packaging, leads trucking by maybe a quarter or so.
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