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Fuel, reduced shipping add to truckers' woes |
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Weathering the storm
The prevailing question for most truckers is how serious the slowdown is and how long it will last.
“I’ve been doing this almost 30 years, and in terms of cycles, I’d say that other cycles have been tougher than this,” said Todd. “But the problem with comparing is that you don’t know how long this will be. I wish we could predict the cycle, and I hope we’re at the bottom, but the problem is that we don’t know how long the cycle will last. If this is protracted, it will be worse because of the rising fuel costs.”
On the other hand, the industry is so diverse that some sectors are sure to weather the slowdown, he said.
“There are some parts of the economy that are recession-proof, and the carriers that supply transportation and distribution services for those areas should be able to weather it pretty well,” he said. “Those with a diverse business base and who are able to adjust by eliminating owner-operators (i.e., independent contract truckers) to reduce size of their fleet have a better chance of controlling costs. They should be able to be strong enough to make it through. The smaller the fleet and the more general the freight they carry, especially with the price of fuel, those are the ones most likely to suffer.”
Currently, most general freight, especially building materials, is in dire straits because of the downturn in housing and general construction.
“But they’ll just have to adapt,” Todd said. “Then when things pick back up, those who weathered it will be in the best position.”
This is just what Adams is trying to do with his fleet at AM-Cell.
“Anybody can drive a truck and deliver,” he said. “All we can do is give better service than anybody else, and hopefully that’ll make a difference in the long run.”
Adams said his team is trying to take things in stride.
“Everybody has up and downs in business,” he said. “We just happen to be in a down cycle right now. It’s just like waves — you have to ride it out.”
Todd referred to the down cycle as “shake-out time” and warns of the tables turning eventually.
“Any business that relies on trucking services and wants to lock in guaranteed trucking services needs to be aware that they should treat truckers well so they can weather the storm and be there in a dependable manner to pick back up later on,” he said. “Because we know this for sure: When things pick back up, there will be less trucking capacity because so many truckers will have gone out of business. On that day, carriers will be able to pick and choose who they’ll work for.
“One day it’s a buyer’s market; the next day it’s a seller’s market.”
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