If Economy Completely Tanks

What changes do you see happening Big Don??? Do you think that eventually we are all going to be driving for the bigger outfits, like JB, Schnider, Werner, that these companies will completly monopolize the industry. This is what I am seeing.

 

Well, my crystal ball seems to not be working very well. . .

I think that there will be more team driving for long haul. I think you will see less and less of non transportation company owned trucks. What I mean by this is that a lot of companies, most notably grocery store chains, specifically Kroger Companies, that used to have their own trucks are now going to contract hauling. They want to focus on THEIR business of choice, not trucking.

I would not be at all surprised to see WallyWorld go this route in the near future. After all, they are a retailer, not a trucking company, although they have one hell of a lot of trucks and drivers. They are already outsourcing some of their loads.

Companies like ACE, Orgill and Do It Best are also likely targets. If these folks find they can save a nickle by having someone else do their hauling, you can bet it will happen. Owning and operating trucks and tractors is expensive. Many of these companies are now owning their trailers, and leasing their tractors. I think it is just the first step of complete outsourcing for them.

What do the rest of you folks think?

 

My two and a half cents:

1. The short-term trend will be more teaming and more regional runs. The days of the 2000-2500 mile runs for solo drivers are over. The days of trucks sitting in truck stops idling 10 hours overnight every night are as good as dead. If you're an OTR driver who is sitting in a truck cab all by your lonesome, better enjoy it and drink up. The party's over. Better start getting all your gear moved to one side of the bunk, as your teammate will need room for his goodies.

2. Oil shale, hydrogen fuel, trucks running on batteries, and ethanol will be exposed as the scams they are. The railroads will be resurrected and expanded, and most freight will begin moving from one marshalling yard to another. Day-cab trucks will displace the dinosaur 379, double bunk behemouth. Regional and local runs will become the norm.

 

I think we are seeing the demise of the o/o slow but sure. The o/o does not have the negotiating power to get volume discounts on parts, tires, or fuel. The lone wolves are a dieing breed. They are falling and failing practically every week. Trucks are being repoed every week and still others are voluntarily turning their trucks in to get back into a company truck. They just cannot make enough money to pay for the business let alone support a family back home. Many are upset but will sigh with relief when the paychecks start rolling in again and the company benefits kick in after 90 days. Better to take home 800 to 900 per week as a company driver (after taxes) than having settlements with negative numbers showing you spent more than you earned for the week.

As for the company driver they are on notice. The companies have an over capacity problem now and so are in the mood to start cutting the dead wood. Drivers that cost the company extra money through poor fuel performance, accidents, and late deliveries (which may cost the carrier a lucrative account) will be shown the door.

Veteran drivers with safe driving histories and good customer service will be kept by the carriers to ensure their customers freight is delivered on time and intact. When it costs over 5 grand on average to replace a veteran driver with a newbie it is down right ridiculous to cut your veteran drivers.

The big carriers have learned to offer lease purchase programs for the naive wannabes and fleece them every week for major profits. It is truly sad from the drivers standpoint but brilliant from the company owners perspective; Get a driver to pay you a premium price for a company truck, have that driver pay for the fuel, maintenance, insurance (collision, and bobtail), pay for all his own taxes, and get to skim the profit from the load because you are the one who lined it up in the first place. Besides the fact the new lease op will want to make as much money as he can so he will run over hours any time it is necessary to get a load delivered on time and will make your company look good with on time service. If the new lease op gets close to paying the truck off and you dont like the guy you can just cut his miles, then repo the truck and then sell it to get even more money for it.

Newbies will find it harder and harder to find carriers willing to hire them when there is little need for new drivers. You may actually see wages stagnate and even fall when there are more workers available than jobs.

As for long haul it has become regionalized through partnerships with the railroads. It saves shippers money and trucking companies are able to put on 2 local drivers for less money than an otr driver makes or spends in fuel traveling cross country and idling each night. Especially part timers that do not cost the company additional money for benefits.

Companies will look for teams to satisfy the JIT shipments which pay extra money for the speedy service. Besides the company gets more profit out of 1 team truck than it gets from 2 solos.

As has been said there will always be a need for grocery haulers and other items used every day such as pharmaceuticals and toiletrie items.

Best advice? Hunker down. Drive safe. Save your money and try to live BELOW your means if at all possible. Do not strike as it will only hurt YOU in the long run. Keep your logs current and do not jeopardize your job by shooting your mouth off to the boss (unless you want to get fired and have a BETTER job lined up first).

 

I agree. However, I don't think the O/O will become extinct slowly. I think half will be gone by the end of 2008. Of those remaining, probably half will be out by the end of 2009. There will always be hangers-on, but by the end of 2010, the O/O in trucking will be as rare as an albino buffalo. He'll be a novelty we can point to and oogle over.

 

So as a newbie heading off to school to get my CDL you are saying I'm screwed?

When the economy slows, people spend less, but they still spend. The goods are still moving, but more slowly.

I agree it's really bad for O/O, fuel costs are making it prohibitive to drive and make money.

As for railroads, things will start looking up for them, but there is not near enough miles or rail lines to replace the millions of trucks rolling every day. It will take a few years and trillions of dollars invested to get the railroading industry up to snuff.

Everyone just needs to keep their wallets open, even if just a little bit. That waitress at the truck stop or the kid selling popcorn at the theater rely on us spending our money just as much as we rely on them. Yeah, it's tight, but spending money is what kills a recession. Living in fear of losing your money is what feeds it.

Biggest culprit is the #### fuel crisis. China had to decide to try to stand up and drive out of the dark ages and suddenly there isn't enough oil to go around.

Personally I need to bring home a bigger paycheck than my current job and I am too old to go to a college to learn something. Driving has lurked in the back of my mind for years and my wife said, "Go for it."

I just need to know a job is there waiting for me on the other side.

 

And you base it on what ?

 

Well, just like everything else in life there are no guarantees.

I agree with what you are saying about "keeping our wallets open," at least to a reasonable extent. But I also think this is an excellent time to review your budget and make sure you are living within, if not well below, your means.

I think the folks who are really gonna get screwed here are the ones living on their credit, and even the ones living from paycheck to paycheck.

Right now, I doubt that many company drivers are hurting too bad. But I sure don't like the way things seem to be going here. My concern is not just a recession, but a full blown depression.

Lets face it folks, these eco-nuts have us by the balls. We can't develop any energy of any type in this country without a major fight. . . .

OK, I'm gonna stop this right now. It is off track from this thread, not to mention a soap box that I climb on that just bores the hell out of most folks. . .

 

I don't know, guys. Maybe 4-dollar-a-gallon diesel for the forseeable future? Think that may be a problem for O/Os? Might even hit 5 bucks a gallon if the Israelis decide to hit Iran and Iran retaliates against oil infrastructure in its region.

I wouldn't count on anything as being a sure thing. Chavez may decide to cut back on exports to the USA and ship more to the Chinese. But then again maybe Shell will figure out how to get the oil shale out of the rocks in Wyoming cheaply and you'll be saved in the nick of time.

There is no sure thing in the world except the fact that there is no such thing as a sure thing. My bet is most O/Os are as good as dead economically, but a miracle may happen.