A trucker’s eye view of Alaskan history

More than a few trucking books have arrived at Overdrive’s editorial offices over the years, but the most recent I’ve gotten is one of the best. It’s “Eighteen Wheels North to Alaska,” by Cliff Bishop. His long career in the West has included many years of driving truck in Alaska. Now, at 86, he’s published his memoirs “to retain some of the history of trucking in Alaska.”

“A common sight on the Haul Road,” says Cliff Bishop’s new book on Alaska trucking.

And a colorful history it is. Some of the book’s 29 chapter titles give you an idea of the diverse ground he covers: “Earthquakes,” “Avalanches,” “Accidents” and “Alaska’s Inhabitants: Wolves, Bears and Characters.”

The “characters” include a young man who worked with Bishop and turned out to be a serial killer; a mentally ill, trigger-happy trapper; and a murderous would-be terrorist opposed to construction of the oil pipeline along the Haul Road between Prudhoe Bay and Fairbanks. For those who didn’t get enough of the Haul Road (the Dalton Highway) on the last season of the History Channel’s “Ice Road Truckers,” there’s a chapter on “Building the Haul Road” and another on “Alaska’s North Slope.”

The book also has dozens of black-and-white photos and an appendix of “Alaskan Drivers and Old-Timers,” listing hundreds of people. And yes, the list includes George Spears of “Ice Road Truckers” fame and, as readers of this space know, the driver with whom I rode in 2006 for a Truckers News feature on the Haul Road.

Bishop's book provides a fascinating look at trucking in a rugged state.

Bishop himself qualifies for the list. He says he’s got his CDL reinstated and is hauling lumber. “It beats the hell out of sitting on my duff and watching TV,” he writes at the book’s conclusion. “I’ve got an old Ford diesel with a 3406 Cat engine with a 53-foot flatbed trailer. I must admit that I am enjoying it a lot. Maybe at age ninety I’ll make a sincere effort to retire. Or not.”

To order the book, visit www.publicationconsultants.com or www.amazon.com. The price is $19.95.

– Max Heine

 

Chalk it up as a decent quarter

There was a mixed bag of trucking-related economic reports Friday, though the good seems to outweigh the bad.

The American Truck Dealers, citing trade press reports, notes that third-quarter earnings reports from fleets show freight volumes appear to be rising, though revenues aren’t keeping pace. Also, U.S. truck tonnage fell 7.3 percent in September from the same month last year. That’s not good news unless you consider that it was the best year-to-year monthly showing since November 2008, observes the American Trucking Associations. ATA’s seasonally adjusted for-hire truck tonnage index dipped 0.3 percent in September from August after rising 2.1 percent in August from July.

In his own weekly roundup, ATA Chief Economist Bob Costello cites the U.S. Bureau of Economic Analysis report that real gross domestic product jumped 3.5 percent (annualized rate) during the third quarter. This marks the first time the U.S. economy has grown since the second quarter of 2008 and the largest gain since the third quarter of 2007. The quarter’s good performance was due in part to the feds’ Cash for Clunkers program, a rebounding housing market and a rise in personal consumption.

These trends are good signs for freight, even if you subtract the federal influence of the car-buying program and the stimulus for first-time homebuyers that ends in November. Still, like other economists, Costello continues to take a cautious view about the speed of recovery: “The third quarter GDP reading was encouraging; however, I expect the economy to grow modestly in subsequent quarters as the U.S. consumer continues to face several headwinds, including employment losses, tight credit, and high debt levels.”

 – Max Heine

 

Landstar optimistic in spite of lower earnings

Landstar System Inc., reported its share of lower revenue and income numbers in its third-quarter earnings statement, but the nation’s largest owner-operator carrier also sees a turnaround taking shape.

The company earned $20 million from revenue of $501 million in the quarter that ended. Sept. 30. Comparable net income a year ago was $33 million from revenue of $733  million.

The good news/bad news, from Henry Gerkens, president and CEO: “Notable 2009 third-quarter over 2008 third-quarter revenue declines continued to be generated from the U.S. Department of Defense, as well as with respect to our substitute line-haul service offering. On a positive note, revenue generated from the automotive sector began to improve for the first time in a couple of years.”

A separate report this week confirmed the strong numbers on auto shipments. Production of cars and light trucks in North America during September reached the highest level since October 2008, said CSM Worldwide, an automotive industry analyst firm.

For overall business, Gerkens also noted a slowing of the decline in number of hauls. From 2008 to 2009, that measurement dropped 16 percent from second quarter to second quarter, but only 11 percent over the third quarters.

“I see a gradually improving overall freight environment, and I believe that the worst is over,” he said.

– Max Heine

 

Trucking experts expect very slow rebound

“The economy has bottomed out, but it is going to be slow going in the months ahead.” That was the consensus of speakers at this week’s annual management conference of the American Trucking Associations, in Las Vegas, says ATA Chief Economist Bob Costello in his weekly newsletter.

One of those speakers, Sara Johnson of HIS Global Insight, predicts a contraction of  2.5 percent this year, followed by an increase of 2.0 percent in 2010 and then a normal 3.0 level in 2011.

Costello told the conference of a record reduction in freight volumes over the last year. “Unfortunately, the historical reduction in volumes was surpassed by an even larger drop in revenues,” he writes. “Still, most sectors in trucking appear to have bottomed out.”

He also cited “a record reduction in capacity,” which should end up as good news for owner-operators (and fleets) who can hold out until demand for their services returns: “While this reduction has been masked by an even larger drop in demand for trucking services, it means that volumes don’t have to return to pre-recession levels before capacity tightens significantly.”

And in a separate report, some other positive news. Class 8 orders for major North American truck makers totaled 10,817 units in September, the fourth consecutive month that orders have shown a month-over-month increase, according to preliminary data from FTR Associates, a consulting firm. Year-to-date orders through September are 5.2 percent ahead of the same period in 2008, reflecting the first year-over-year increase since June 2008.

 – Max Heine

 

Latest report bodes well for freight

More good news for manufacturing. A month ago, Institute for Supply Management data showed that manufacturing grew in August, for the first time since January 2008. ISM reported today that September gave an encore performance.

“While the rate of growth moderated slightly when compared to August, the recovery broadened as the number of industries reporting growth increased from 11 to 13,” says ISM’s Norbert J. Ore. “Both new orders and production are growing, but at a slower rate when compared to August.”

Those 13 growing sectors, listed in order: wood products; paper products; apparel, leather and allied products; transportation equipment; textile mills; printing and related support activities; petroleum and coal products; electrical equipment, appliances and components; fabricated metal products; chemical products; computer and electronic products; miscellaneous manufacturing; and food, beverage and tobacco products.

The four industries reporting contraction in September are: primary metals; furniture and related products; plastics and rubber products; and machinery.

ISM’s index was 52.6 for September, following a 52.9 in August. Any level over 50 indicates growth. The Associated Press reported that analysts polled by Thomson Reuters had expected a 54 for September.

– Max Heine

 

Manufacturing numbers strong for August

Lots of good news for trucking in today’s report from the Institute for Supply Management.

Economic activity in manufacturing expanded in August, following 18 consecutive months of contraction, according to the nation’s supply executives polled for the latest Manufacturing ISM Report on Business. The August numbers also show the overall economy grew for the fourth consecutive month.

“The year-and-a-half decline in manufacturing output has come to an end, as 11 of 18 manufacturing industries are reporting growth when comparing August to July,” says Norbert Ore of ISM. “While this is certainly a positive occurrence, we have to keep in mind that it is the beginning of a new cycle and that all industries are not yet participating in the growth.”

Those hot 11 sectors are, in order: Textile Mills; Apparel, Leather & Allied Products; Paper Products; Miscellaneous Manufacturing; Printing & Related Support Activities; Computer & Electronic Products; Transportation Equipment; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; and Chemical Products.

The six industries reporting contraction are: Primary Metals; Plastics & Rubber Products; Furniture & Related Products; Wood Products; Food, Beverage & Tobacco Products; and Machinery.

“The August index of 52.9 percent is the highest since June 2007,” Ore says of the PMI (Purchasing Managers Index). “The 4 percentage point increase was driven by significant strength in the New Orders Index, which is up 9.6 points to 64.9 percent, the highest since December 2004. The growth appears sustainable in the short term, as inventories have been reduced for 40 consecutive months and supply chains will have to re-stock to meet this new demand.”

Ore also notes that if the PMI for August (52.9 percent) “is annualized, it corresponds to a 3.7 percent increase in real GDP annually.”

 – Max Heine

 

Small-business lending bounces back

Borrowing money isn’t the best thing for an owner-operator to do in a down economy like this. But if you must – or plan to do so as soon as the recovery becomes more evident – it’s good to know how the market is changing.

Small-business lending was dead in the water last year as the credit market collapsed, but CNNMoney.com reports that it’s “managed to heal itself” without help from the federal stimulus funding.

“Figuring out how to revive the secondary market has been a priority for the Small Business Administration and the Treasury Department. The government set aside billions to invest, vastly eclipsing the money earmarked for other small business stimulus efforts. But while government agencies struggled to get their programs up and running, the market came back to life on its own,” says the website.

SBA has been offering new money through its America’s Recovery Capital this year, but owner-operators keep running into roadblocks when they try to borrow, reports the Owner-Operator Independent Drivers Association.

 – Max Heine

 

Factories busier in July

Industrial production increased by a half-percent in July, the Federal Reserve announced today. While housing and other indicators with relevance to truck freight have shown twitches of life in recent months, this marked the first monthly increase in this measurement since December 2007 (not counting a hurricane-related rebound in October 2008).

The manufacturing component of the index rose 1.0 percent in July. This was mostly due to a tax-revived auto industry, which saw vehicle assemblies jump from 4.1 million units in June to 5.9 million in July (annualized rates).

Here’s the entire report, which covers other segments, as well.

– Max Heine

 

 

Small business still hurting

 If you’ve caught the business news in recent days, you know there have been some positive signs. Home prices and sales, employment and other indicators are looking better, possibly meaning a bottoming out of the downturn.

But when it comes to small business and credit, it’s still a mess, reports CNNMoney.com: “Bank lending is down, credit card interest rates are up, and the country’s largest small business lender, CIT Group … is hanging by a thread.” Not good news for owner-operators, who even in good times often rely too much on credit, and many of whom struggle with trying to escape a bad credit rating.

The article reviews President Obama’s promises and programs intended to help small business survive the recession, such as passage of the credit card reform bill and increased lending by the Small Business Administration.

– Max Heine

 

70 years in one minute

I was fortunate to be invited to Peterbilt’s 70^th anniversary celebration at the Denton, Texas, headquarters this week. As part of a presentation to dealers and customers, the company presented this cool little video that shows many of the truck models morphing into each other, reflecting the changes over seven decades.

Also, note the top two photos on the right for a glimpse at a few trucks that stand out in Peterbilt’s history.

And if you haven’t already seen our story, check it for more detail about the company’s history and anniversary celebration.

 – Max Heine