LiberalTrucker contributed this post for Masslogics Trucking News. The recent housing crises, floods, tornadoes and the war in Iraq have not really helped the American economy. Billions of dollars have already spent on the war in Iraq and there is no end in sight. Prices of food, water, electricity and gas have all gone up. Almost every State in the country is affected by this recession and there is no solution in sight. In the US many people think it is just the housing industry that has been affected but the trucking industry has taken just as big a hit. And this is just the first signs of trouble.
The price of diesel has gone up many folds in the past few years. Almost every trucker can confirm that there is a major slowdown in business and this has affected entire communities in the US.
Current estimates from the American Trucking Industry indicate that nearly 1000 small trucking firms go out of business every time diesel fuel prices push up more than a dime.
Profits are so thin that most small time truckers have very little margin to sustain the losses. This is partly because of the millions of truck drivers available and the administrative costs. So any small increase in the price of fuel makes it difficult for the small carriers to exist. Transmitting the higher costs of fuel to customers does not normally work as the customers usually go somewhere else, see Don’t Take that Load Part II
The larger trucking companies have some leeway and are able to maintain some profits by passing the costs to shippers who eventually pass the high costs to the average consumer. However, this has not also worked since most consumers have really cut down on spending.
The future of the trucking industry is not clear and appears bleak. Unless the government eases regulations and allows more refineries, there are many more businesses that will join the truckers.
June 6th, 2008 at 10:03 am
The fuel problem is universal, everybody is dealing with the same problem. Everybody is passing on the cost to shippers, so, if a carrier can hang in there, and make their presence known, they stand to pick up a ton of new customers. I would consider this a time of opportunity, not a time of crisis if you stay in the right frame of mind.
June 26th, 2008 at 2:18 pm
The problem is that smaller trucking firms may not be able to “hang in there”. Larger companies with deep pockets are much more resistant to lean times. Saying “everyone is dealing with the same problem” oversimplifies the issue.
August 20th, 2008 at 6:53 am
You sure hit the nail on the head. Blanketing one answer for so many different individual situations is not fair. Many good people have been hurt by the situation. There is an advantage to not having 50 pieces of iron sitting in the yard with payments though. One account, that pays good, pays fast and is flexible with fuel costs can change everything for an independent. Relying on load boards is like buying a lawn mower, then asking other mowers for work, instead of knocking on a few doors yourself. DIRECT relationships with your OWN accounts is the key to higher margins, more consistent work and faster pay. I just wish everybody didn’t do what was easiest. Load boards offer instant gratification, but put you in the same situation every morning. Wouldn’t it be nice to sit up in bed, and say “This week, I’ve got 5 loads from this guy, 3 loads from that guy, and all I have to do is fill in a few blanks”. A long term business plan to get your own accounts doesn’t always yield immediate results. In the beginning, it’s hard, costly and brings little, but isn’t that the way everything works in business? Load Boards take away the hard, but leave you totally vulnerable to whatever crumbs somebody else wants to throw you.
August 29th, 2008 at 11:42 am
I have had my trucking company for 28 years atarting with one truck. This is worst i have ever seen it. I see brokers fighting over the loads. Looking for that one sucker to haul his load. Shipping managers are enjoying the feast of down and out trucking companies clinging for just one more day. The frieght shortage is very minor to the fact trucking companies cant say the word no to cheap frieght. I always thought it would change, but its not, so basically its the dummies taking cheap frieght draging everone down with them. LEARN THE WORD NO to cheap friehgt. IF you dont then get the hell out of the way of trucking owners that know the word no. Dont drag us down with your stupity, wt.balmer