This is the time of year when resolutions are made and predictions forecasted. Within the trucking industry, economic forecasts are the most eagerly awaited predictions.
Although economic forecasting is by no means an exact science, there are signs that the trucking industry will have a better year. And everyone should look for signals, or bellwethers; companies must prepare themselves as much for a rebound market as much as they do for a depressed market.
One bellwether for the industry has always been the flatbed trucking market. The word on the street in that segment squares with recent national indicators predicting things will begin turning around by the second quarter. Economists cite new housing starts and the automotive industry as two important market indicators. Because flatbed carriers haul raw materials such as wood and steel, tracking their growth is a clue to what’s ahead for trucking.
In fact, 18 months ago, when the rest of the industry was riding the crest of the biggest economic boom in recent memory, Stephen Rumsey, CEO of WTI (formerly Welborn Transport Inc.) of Tuscaloosa, Ala., realized things were grinding down. “We are in the front lines and when steel and lumber started slowing down in spite of the flourishing economy, we started tightening our belt in response to the market.”
Since then, fuel and insurance increases along with skittish bankers helped drive thousands of trucking companies out of business and even more owner-operators to either leave the industry or become company drivers. Rumsey says that the companies still standing are in an unprecedented position to benefit from the market once it rebounds. Less competition also means possibly the first real chance to increase freight prices.
Recently, steel and lumber has begun to pick up in response to housing starts and the depletion of automotive inventories. What can you do to be ready for the rebound?
Rumsey suggests concentrating on hiring the best possible drivers available, culling your less productive drivers and increasing safety and training programs. Analyze driving practices that increase utilization. Instead of adding more trucks, schedule drivers to maximize their time more efficiently. Maintain your equipment so it’s ready to roll. Continue investing in upgrading technology like satellite tracking and optimizing software.
When demand increases, those with the most efficient, safe drivers driving well-maintained trucks will be poised for the return of the trucking industry.
Chip Magner is publisher of Commercial Carrier Journal. E-mail Lmagner@eTrucker.com.