This blog has been moved to Overdrive’s new website. Or you can go directly to the blog here.

There’s a lot more in the way of blogs, videos, news, services and other owner-operator resources at the new site. I hope you’ll check it out.

— Max Heine

Manufacturing monitor ISM issued a good news, bad news report today, but the good outweighs the bad.
   The sector expanded in November for the fourth consecutive month, says the Institute for Supply Management. The downside is that the rate of growth is less than a month ago, and less than analysts expected.
   “The signs are still encouraging for continuing growth as both new orders and production are still at very positive levels,” says Norbert Ore, head of ISM’s Manufacturing Business Survey Committee. 
   So what freight is hot? Here are November’s dynamic dozen leading sectors, in order:
· Apparel, Leather & Allied Products
· Printing & Related Support Activities
· Petroleum & Coal Products
· Miscellaneous Manufacturing
· Electrical Equipment, Appliances & Components
· Transportation Equipment
· Chemical Products
· Computer & Electronic Products
· Food, Beverage & Tobacco Products
· Paper Products
· Fabricated Metal Products
· Machinery.
   And the five showing a November decline:
· Wood Products
· Furniture & Related Products
· Nonmetallic Mineral Products
· Primary Metals
· Plastics & Rubber Products.
— Max Heine

It still appears to be a buyer’s market for Class 8 trucks, according to a report from the truck dealers’ trade group. It’s been “a year of heavy depreciation for the highway sleeper market,” says the ATD/NADA Official Commercial Truck Guide.

Considering the depressed conditions, prices could have dropped even lower, says Chris Visser, editor of the guide. “Anecdotal evidence suggests that an extremely active export market helped keep the domestic supply of used trucks at a realistic level, which counteracted reduced demand,” he says.

Also in the report:

  • Mileage, not model year, was the determining factor in a used Class 8 truck’s value this year.
  • Trucks with less than 500,000 miles retained a moderately good percentage of their value.
  • Medium-duty trucks lost a substantial portion of their value throughout 2009, and mileage was not as critical a factor as with the Class 8 market.

Given the economy, it’s hard to measure the relative strength of any pre-buy this fall in lieu of the 2010 engines, but no one is forecasting any kind of truck sales increase early in 2010.

— Max Heine

If you still have any doubt about how dangerous texting while driving is, a new study offers some comparisons.

A post from the Poynter Institute, a journalism education group, notes that 26 percent of teens admit to poking out messages while they’re behind the wheel, according to a Pew study. I bet the reality is higher than that, but what’s really scary are results from a Car and Driver magazine experiment.

Using a deserted air strip, an editor was tested under four circumstances on response time for braking upon seeing a brake light. Driving at 70 mph with full attention and no impairment, it took a half second to brake. It got worse with these handicaps:

  • Legally drunk, add 4 feet for stopping distance
  • Reading e-mail, add 36 feet
  • Sending a text, add 70 feet

Thanks to my Overdrive colleague Lucinda Coulter, who noted the Poynter item as well as this next bit of news.

The daughter of famous boxer George Foreman, Freeda George Foreman, is accused of crashing her Cadillac CTS into a garage, damaging it and five cars inside, according to KTRK-TV Houston. She wasn’t texting, but eating cake, according to what the garage owner told the TV station.

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 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

“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