June 2009


Wednesday started with bad news/good news economic reports for trucking. Both involve May numbers.

New orders for durable goods were up by 1.8 percent, says the Commerce Department. That’s better than expected, and a welcome report for any business related to manufacturing.

On the down side, sales of new homes fell, which also wasn’t expected. They were down almost a third from a year ago, reports the Commerce Department.

The market placed more weigh on the durable goods number, and stocks were up at mid-day, particularly those of motor carriers and package shippers.

As Blogger Andrew Leonard says, noting those two reports: “It’s tough out there for an economic forecaster. Everything’s unexpected!”

 — Max Heine

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Today’s report on the Leading Economic Indicators is good news. It “increased sharply for the second consecutive month in May,” says The Conference Board.

The strong points include some fiscal things, like interest rates and stock prices, but the positive freight-related items were building permits and, more indirectly, vendor performance and consumer expectations.

“The index rose 1.2 percent (a 2.4 percent annual rate) between November 2008 and May 2009, the first time the index has increased over a six-month period since July 2007, and the strengths among the leading indicators have become balanced with the weaknesses during this period,” says The Conference Board.

— Max Heine

A memorial to Dale Harris was aired on "Ice Road Truckers."

A memorial to Dale Harris, shown here at the Hilltop Truckstop, was aired on "Ice Road Truckers."

Those of you who caught the first episode of this season’s “Ice Road Truckers” might recall a part on how some of the truckers who’ve died on Alaska’s Dalton Highway have been memorialized at the Hilltop Truckstop. The Hilltop is between Fairbanks and the start of the Dalton, also known as the Haul Road, which runs up to Prudhoe Bay.

As an example of the tributes, the program showed one on the wall for Dale Harris. Animation explained how the trailer of an approaching truck jackknifed on the icy road to slam into Harris, killing him in 2007.

I met Harris over breakfast at the Hilltop in July 2006 when I rode the Haul Road with George Spears, now one of the star drivers on “Ice Road Truckers.” Like most of the drivers, Harris was full of stories, full of life. He told me how on his first Haul Road trip, as a 19-year-old trainee in 1974, the driver rolled their fuel truck over while descending a 12 percent grade. A pickup driver rescued Harris, only to spin out on a curve and plunge down a long hill. “It was so steep they dropped a fire hose down to me and I climbed out,” he recalled.

I spoke this week with Take’ Hunziker, who drove with Harris and later became his dispatcher at Sourdough Express. “He coached softball and did a bunch of other stuff,” Hunziker says of Harris, whose handle was Spud. “I know he loved horses, did a lot with his family.”

I also spoke with Spears. He remembers that Harris, who had a son and a daughter, was involved with Boy Scouts and high school wrestling, and worked as a volunteer fireman. In a memorial parade, “We had 97 trucks come out of Fairbanks and go up to Hilltop, just for Spud,” Spears recalls.

Perhaps subsequent episodes will prove me wrong, but it will be a shame if the History Channel series, which so far seems obsessed with truck wrecks, doesn’t show that many of these drivers, like Harris, are multi-dimensional people. They can do a lot more than navigate a hazardous road.

You can read my account of riding the Haul Road with Spears here, or view photos from that ride at the top of the gallery on the right.  

 — Max Heine

If you’re thinking of getting your own authority for truckload hauling, think again. Or have some excellent contracts locked up before you jump.

A June 8 conference call, hosted by Dahlman Rose & Co. with executives from five carriers (Cowan Systems, Fenway Partners, First Express and Roehl Transport), had little good news.

“There was universal agreement that we are experiencing one of the worst pricing marketing in truckload history,” says Dahlman’s summary of the conference. The pressure is expected to stay indefinitely. Shippers are pressing for “more favorable fuel surcharge applications, lower assessorial charges, and more favorable payment terms.” One large shipper tried to get Roehl to accept payment terms of 120 days instead of 30 days, said Roehl’s Andy Vanzant.

He also estimated 10,000 to 20,000 carriers on the verge of bankruptcy, and that $3 diesel could seal their fate.

There were reports of carriers moving their trade cycles from 36 months to 42 or 48 months. Also, shippers are increasingly using third-party brokers or carriers for their cheap capacity, according to the summary

DIESEL PRICES have been rising like the afternoon high temps here in the Heart of Dixie, where I’m based, and so are the diesel price forecasts from the U.S. Energy Information Administration’s monthly Outlook.

From today’s EIA report:Diesel fuel retail prices, which averaged $3.80 per gallon in 2008, are projected to average $2.40 per gallon in 2009, up 14 cents from the previous Outlook.  Diesel fuel retail prices are projected to average $2.67 per gallon in 2010, up 19 cents per gallon from the previous Outlook.”

Most recently, average prices jumped almost 15 cents, to $2.50. The past four weeks logged an advanced of 23.5 cents.

— Max Heine

The top three photos on the right are from my 2006 ride along Alaska’s Dalton Highway with the smiling trucker, George Spears. It was published in Truckers News.

If you watched the History Channel’s third season of “Ice Road Truckers,” which premiered last Sunday, you might recall Spears, one of the featured drivers. This season’s shows are based on the drivers of the highway, also known as the Haul Road. Running from just north of Fairbanks to Prudhoe Bay, it was built in the 1970s along with the Trans-Alaska Pipeline.

When I talked with George this week, he said the current “Ice Road” series was produced last winter, one of the worst in a long time. One problem was that temperatures were above 50 for a while, and at least a dozen trucks slid off the melting ice. “Them History Channel boys were on those wrecks just like a vulture,” said Spears, who drives for Carlile Transportation Systems. While he knows well the road’s dangers and the demands they place on drivers’ skills, he thinks the show’s producers “kind of dramatized it” with the constant emphasis on spinoffs.

I hope to do a few more entries on the show this summer. It airs at 8 p.m. CST on Sundays. I’ll  also post photos from my ride that we didn’t have room for in the Truckers News story.

— Max Heine

 

It seems that for economic news, June is bustin’ out all over, to cite the song from the old play, “Carousel.” Well, not all over, but there were some strong items announced June 1. I hope you’re seeing evidence in your freight.

The overall economy grew for the first time following seven months of decline, according to executives surveyed in the latest manufacturing report from the Institute for Supply Management.

Also, “May is the first month of growth in the New Orders Index since November 2007, with nine of 18 industries reporting growth,” says ISM’s Norbert Ore. “New orders are considered a leading indicator, and the index has risen rapidly after bottoming at 23.1 percent in December 2008.”

Another up note: U.S. construction spending. This sector had “its biggest increase in eight months in April, advancing for a second straight month as the private sector put money into both residential and nonresidential projects,” reports Money/CNN.

Meanwhile, consumer spending fell a mere tenth of 1 percent in April, which is less than the three tenths it fell in March.

Back to ISM: Five of the 18 manufacturing industries reported growth in May. The winners, in order of growth, are: nonmetallic mineral products; plastics and rubber products; machinery; food, beverage and tobacco products; and printing.

— Max Heine