Thu August 6, 2009
Freight Industry Still Reeling
Kansas City, MO – First thing Saturday morning at the big truck stop out in Oak Grove, Missouri the restaurant is not quite half full of truckers.
Jones: My name is Dee Jones. Dee is a nick name that I've gone by for 66 years, and I'm known nationwide by it.
Like many of the other guys Dee Jones is here killing time, and making calls, looking for work.
Jones on phone: Good morning in Jeff. Oh, I'm just sitting here in Oak Grove. well I'm waiting for you to give me some good news.
Not much of that lately. For every five truck loads moving last year, there are now only four. That's left Jones parked here in his black cap, red shirt, and boots.
Jones: If somebody come up with a hot load here, I'm gone. If not, I'm here for another day. Freight's down! Way down.
Jones finds work where he can. His last load before today was hauling shell casings for military bullets to the plant in Lake City. He also hauls hazardous farm chemicals. Drivers pulling flat bed trailers have it the worst. Those open platforms normally cart heavy machinery and construction materials. Demand for those loads has really plunged. Shipments of construction materials and heavy equipment are off the most, fresh and frozen food, the least. But, even Mack Sheppard, a big guy at the counter who hauls meat and produce in a refrigerated truck is idling here today .
Sheppard: I been doing this for 32 year, so I kinda it kind of comes and goes, but here lately I ain't never seen it this bad.
And these days, when Dee Jones fires up his diesel it's likely as not to be for a long haul empty just to make a pickup. Truckers call these wasteful trips "deadheads", and try hard to avoid them. Dee Jones says that was easy when goods were really surging through the country. No more .
Jones: That is a no no! That burns your profit up, in a hurry.
Costello : We haul the tangible goods of the economy. The things you can touch and feel, if they're not producing more, or people aren't buying more, trucking is going to feel it.
Bob Costello is an economist at American Trucking Associations.
Costello says shipping rates have collapsed along with demand.
And the slowdown's hitting independents and big trucking firms alike.
Costello: Trucking companies are just shrinking. They're just getting rid of trucks. You don't need em.
Trucking isn't the only part of the freight chain suddenly way too big for this economy.
Ferrell: Yeah there's a lot of empty warehouses.
In Kansas City, alone, there is millions of feet of empty warehouse space.
Doug Ferrell, is vice president of Scarborough International a warehouse and customs broker up by KCI.
Ferrell: The range of stuff that comes through this warehouse is very broad, anywhere from animal pharmaceuticals, to plastic material for Walmart cups, plates, to tractor engines, diesel engines...
As a machine shrink wraps a spinning pallet of plastic Christmas nick knacks, Ferrell says that the warehouse business overall has dropped about 20%, though they have noticed a recent uptick as some of the seasonal business starts to come in.
And a few miles away near Riverside, Keith Milburn the owner of Creative Fulfillment, another warehouse , says he's they've also seen a couple of bright spots... these light up mirrors they're unpacking.
Milburn: They're what I would describe as vanity mirrors or lady's make up mirrors... from China We had one container that came in last Thursday, one in today, and another in a couple of weeks.
High end wool socks, too, and 500 dollar, leather bound, Beatles trivia books... they can hardly keep that stuff on the huge steel shelves here. Milburn unpacks loads from factories and sips them directly to consumers who order them on line... That business is not doing to badly, and Milburn has just expanded. But, economist Bob Costello cautions that, overall the freight system is in for more pain. And who knows when or if Americans will start buying enough stuff to once again justify a logistics network built to accommodate a nation of wealthy free-spenders.