TRUCKLOAD AND LTL SURVIVAL TACTICS

MILE MARKER # 52

Survival mode is engaged for both less-than-a-truckload and truckload companies during this rough stretch. You will probably see a spike in consumer spending for the month of December, due to holiday responsibilities. People will spend what little extra cash they have to make Christmas happen, but probably will go into hibernation for the next three or four months of the new year.

Truckload carriers tend to weather the storm in a weak economy better than LTL carriers. The profit outlook is much more negative for LTL than truckload for the near term. Industrial freight is very weak at this time, and that's more of the core business for LTL. Truckload carriers haul more consumer goods and staples.

The economy continues to soften, and nobody is exactly certain where the bottom is. Companies continue scrambling to make necessary changes that coincide with the present economy. Conway is changing its network by trimming the roster of terminals and rescheduling their line haul shipments. YRC is doing what they are doing with the merger and Teamster relief. I've covered those processes in previous blogs. I found it interesting that ABF wants to get labor concessions similar to what YRC's companies are getting, but there is a catch. At the Union meeting, a couple of ABF representatives were present, but when they found out that YRC management was involved with the 10% giveback, they didn't want any part of it. They were like, "Management too?" They said, "No, we're good." It's funny how they changed their tune. They were all about screwing the driver though, they ran to the meeting. At least YRC cut the whole entire work force 10% to try and get through these hard times. We'll see what ABF eventually decides to do.

When the trucking industry starts to rebound, the surviving carriers will do well. The question is, "Who will survive?"