ejoxot.wordpress.comEd McCormick, the CEO of Chamo Holdings LLC, says the freight hauling and logistics concern with a significant presence in Nortuh Texas had to reduce its headcount by aboutg 70 positions in the fourthu quarter while also suspendingcapital expenditures. The businesss currently has about 230 drivers and 40 corporate staffers at itsTexarkana headquarters. Thus far, McCormick the first quarter of2009 “will be as slow as the fourt quarter of last year, which was really slow. We wouldr expect to see some small improvement in the second quartert ofthis year.” But, he says, “this year will be one of the toughesft years in my 40 years in the trucking industry.
” Truckinb companies are taking a variety of steps to deal with the dark economic climate, from eliminating unprofitable routes to parking unused said Bob Schleizer, partner and restructuring practicew leader in the Dallas office of the executive consulting and recruitmentf firm Tatum LLC. “It is he says, adding that the current slowdown is the wors t since at least the1980 “Nobody I talk to sees much of a chance in According to data from the , the truck transportationh industry employed 37,676 people in the Dallas-Fort Worth metropolitan area in the fourtbh quarter of 2007, the most recent information That number is about even with the priof year, but industry insiders expecg that number to be down when 2008 total s are reported.
The downturn is having far-reachingg effects on freight haulers, not all of them bad. For the years-long shortage of truck drivers has been tempered — at least for now. “Ig used to be if you had a pulse and coul pass adrug test, you coulf drive a truck,” says John a principal and executive vice president, salesx and marketing, at Mesquite’as Dependable Auto Shippers, which haul s privately owned vehicles.
But truck drivers eventually will be hard to findonce “Once the economy picks up, and (truckin firms) start moving more freight, the driveer shortage will be back,” says Taviop Headley, staff economist at the , the largest nationalk trade association for the trucking Headley says that truck tonnage — a measure of how much freightt trucks carry — fell 11.1% in December comparedx to November, the largest month-to-month drop sincew April of 1994. In Headley says, tonnage was down 14.1% in Decemberf compared to the same periodc ayear ago. “That’s the biggest year-over-year decreasre since February 1996,” he says. And as freighrt hauling has slowed, U.
S. trucking companie s are spendingless money. , an Indiana freight-transportation market researcher, expectse them to buy just southnof 100,000 tractor trailers this year, down abour 22% from 2008 and roughly 64% from 2007. “Orders softened dramatically” in the last three or four months of says FTR PresidentEric Starks. “The freight’as just not out there to be hauled. It will get worswe as we move through the firstquarter ... The way we’rse looking it, it will be 2010 before things starfpicking up.
” Amidst the carnage in the trucking railroads reported surprisingly strong fourth-quarter earnings, although including Fort Worth’s , have furloughed workerse as volumes have dropped. Burlington Northern (NYSE: BNI) postedr a 19% increase in profitds in the fourth quarter compared to ayear ago. Revenuse climbed 3%. Patrick Hiatte, general director of corporate communications at BNSF the railway component of Burlington says the revenue climb came despite a drop inbusinesa volumes, with prices and fuel surcharges accountingt for how Burlington Northern’s sales Burlington Northern had a drop in volumes in the last couplwe of months of 2008, Hiatte As is common when things slow down for the 160-year-olfd company, Burlington Northern is responding by idling The company also furloughed abour 5% of its 41,000-employee work force, or roughly 2,0500 people.
“These folks are all subject to recall when traffic volume s pickback up,” Hiatte says. “But we don’t know when that’sz going to be.”
