The Source for Trucking News, Opinions and Trucking Jobs | A Perfect Storm

We have the on-going truck driver shortage, the economy is picking up and truck tonnage is up.

commercialappeal.com – Memphis, TN: Business
As economy rolls, trucking companies strain to keep up
Between a pickup in the economy and truck and driver shortages, there’s so much freight now, June and July felt like peak holiday shipping months in a season that usually starts in September.

“Truckers have never had the hammer before,” said Mike Bruns, president and CEO of Comtrak Logistics. “They’ve got it now.”

Truck tonnage in the first half of the year was up 7.2 percent in an economy surging at 4.5 percent, according to Bob Costello, chief economist at the American Trucking Associations.

The increase includes reports from steamship companies that loads from China will increase 160 percent beginning in August.

And the solution on the trucking side -

“The companies can’t add new trucks because they can’t find quality drivers,” Costello said. “You can’t just hire anybody off the street to be a truck driver. The reality of the situation is that they have to go through training, they have to have a commercial driver’s license and then only the people with the safest records get hired.”

Assure Intermodal has been able to hire 15 drivers since May, said CEO Christopher R. Folk.

“It’s hard to find qualified, responsible, safe drivers,” he said.

Everyone knows the answer to this one – It’s hard to find qualified CHEAP drivers that are responsible and safe.

“In the soft economy, we were lulled to sleep thinking everything was fine,” said Bruns, who is now getting calls from shippers wanting guarantees their freight will move on time.

“Some are people we’ve never heard of, offering to more than meet our price,” Bruns said.

At Cornerstone Systems, a local trucking firm, growth in 2004 is “up way over double digits,” said Rick Rodell, chairman and CEO. “We’re already spiking and running short of equipment.”

The story is the same at the railroads, which are so backed up in the western part of the country that they’ve been forced to turn some loads over to trucking companies.

Which brings us to the third part of this Perfect Storm.

Grand Island Independent
Woes at Union Pacific create a bottleneck for economy
The Union Pacific system, stretching from the Midwest to the West Coast, has been gripped by a series of operational breakdowns. Failing to anticipate a surge in demand for shipping, the railroad has found itself without adequate staffing to handle the extra freight. As a result, parts of Union Pacific’s network have come close to seizing up, with labor shortages creating rolling bottlenecks and delays.

Freight yards and tracks have been so clogged that entire trains have been stuck for days. The railroad can’t move empty cars quickly enough to pick up shipments, which are taking days or even weeks longer than they should to reach their destinations, if the railroad is able to carry them at all. Union Pacific, based in Omaha, Neb., is now turning away customers.

The company’s troubles, the worst since its massive service breakdowns of the late 1990s, come at a pivotal time for the recovering U.S. economy. In total, railroads carry more than 40 percent of U.S. freight volume, and Union Pacific controls nearly a third of that business. It carries about $300 billion a year of raw materials and finished goods.

And this isn’t even the peak season yet!

The regular tide of foreign-made DVD players, sneakers and other big sellers will begin reaching U.S. shores this month for the critical holiday-season. With trucking companies and other railroads also squeezed for space, Union Pacific has become a major business constraint that could create shortages for retailers and higher prices for customers. In addition, rail analysts are expecting a strong grain harvest this year, which will further strain Union Pacific’s system.

And I thought there were delays in trucking.

The train — 100 railcars long and packed with imported electronics, new Toyotas and other cargo — sat for three days past its scheduled departure because Union Pacific had no locomotives available.When Union Pacific found the locomotives, there was a two-hour delay relating to unfinished paperwork and congestion in Union Pacific’s East Los Angeles yard. “It’s a horrible system,” says Michael Jarel, the train’s 48-year-old engineer. “They throw obstacles in your path.” When he was ready to leave, at 6 p.m., Mr. Jarel was blocked by locomotives moving cars around on the same track.

Everyone has Hours of Service problems

Eight miles later, as the lights of Palm Springs sparkle in the distance, Mr. Jarel stopped again. This time, he was the problem. A fresh crew was called to relieve Mr. Jarel and his conductor because they were approaching hitting federally mandated 12-hour work limits. He was picked up by a van that drove him to Yuma, Ariz., the official end of his route where he normally hands off to another crew.Mr. Jarel says he often can’t complete the entire 258-mile run to Yuma. Because additional crews are drafted to deal with this kind of problem, other trains sit idle without anyone to drive them.

And everyone has a driver shortage.

Union Pacific is planning an infusion of locomotives and new crew members. It’s hiring trainmen and conductors, whose duties include fixing minor breakdowns. As their ranks are replenished, Union Pacific will teach veteran conductors, who are in charge of the individual trains, how to drive them. Because that training takes at least six months, finding enough engineers will still be a “challenge over the balance of the year,” concedes Mr. Young, the Union Pacific president. In the meantime, the company has been turning away some of its highest-profile clients, including United Parcel Service Inc.

Train crews, truck drivers, where are all these people going to come from? That was rhetorical. Of course they are going to come from overseas because Americans can’t or won’t do these jobs. (...for the money we want to pay them. Because if we paid them more, goods would cost more and that would hurt the economy.) Congress says, “okie-dokie”, open the flood gates. Give a 100 car train of hazardous materials to a terrorist. There’s already a concern in trucking, requiring hazmat haulers to go through background checks. Hopefully they are thorough enough.

Want to add insult to injury? How about all the truck drivers that are working now – Let’s cut back on the hours they’re allowed to work and slow all this down to a screeching halt. Which is the goal of PATT, CRASH and Public Citizen. They are going to make a big problem worse. Hopefully DOT and FMCSA, ATA, OOIDA and whoever else can hire bigger lawyers and find sane judges to shut those people up once and for all.

The solution is more pay for drivers. Everyone says that. They have to make trucking an attractive career instead of just a job and pay better than the construction or other blue collar jobs. But if the costs of goods goes through the roof because of transportation costs, the economy is going to tank and we won’t need to worry about it. It’s a fine line this industry and market is going to have to straddle. It’s going to be hard enough without idiot judges interfering or importing a bunch of drivers or train drivers as cheap labor, so when the economy slows down, there will be a glut of drivers and we won’t be able to get paid squat.

The economy is cylical, remember? So is trucking. After any slowdown in the economy dozens of trucking companies go under and where will all these foreign drivers go? Send them back? When has that ever happened?

Originally posted 2004-08-02 03:30:00.