Trucking Industry Recovering From Recession
Carriers in the trucking industry are climbing out of the recession that began in 2009, owners in the north country say, although high fuel prices and state regulations have made the rebound a challenge.
For Teal's Express Inc., Watertown, which has a fleet of 120 trucks and 11 distribution centers across the Midwest, sales rose about 10 percent in 2011 compared with 2010, Vice President Joseph T. Teal said. As a "less than load" common carrier, the company transports cargo from its distribution centers anywhere from 100 to 5,000 pounds, he said, and serves an array of manufacturers in different industries.
Sales nearly climbed to where they were in 2008 — about $23 million — with an increase of about $1 million from 2010, he said. He said industrial suppliers with which the carrier does business were hesitant to build their product inventories during the recession but are doing so now, a sign that the national economy is gaining steam.
"That hasn't been the case since the collapse of the economy," he said of the trend. "Most companies were only ordering what they needed — not keeping an inventory of it — but that seems to be somewhat reversing."
The number of 18-wheelers driving through New York from Ottawa, Ontario, to major cities south of the border — New York City, Baltimore, Md., and Port Elizabeth, N.J. — also has picked up noticeably, he said. The increased number of trucks on Interstates 87 and 90 has been evidence of the trend. "If you looked back and compared the numbers with 2009, you would see a dramatic increase," he said. "When you drive down the state freeways and stop at the rest areas, you can gauge it."
He added that while most carriers stopped operating about 25 percent of their fleet during the recession, "those trucks have begun to roll again."
Beaver River Distribution, Denmark, a small carrier with a fleet of 10 trucks, has increased business every year since the recession, said Louanne Zehr, who co-owns the company with her husband, Lowell V. She said the carrier does about 90 percent of its business in the Northeast, from Ohio to Maine.
Last year "was considerably better than 2010, and amazingly better than 2009," she said.
Another small carrier with a fleet of five trucks, Northern Logistics, Watertown, has combatted the challenging economic climate, said Kristin A. Wilcox, co-owner with her husband, William P. The majority of its freight is shipped to Midwestern states.
"Since 2008, the volume of our freight dropped, and then in 2010 there were signs of freight picking up slightly," she said. "This last year has been steady — we've lost some accounts, gained some accounts."
Although she's optimistic that business will pick up in 2012, she said she doesn't expect a noticeable rebound until the national economy starts showing signs of life again.
"I wouldn't say we're rising out of the recession yet," she said, "but we're maintaining what we have. We're going to watch how things progress in 2012."
Kendra L. Adams, executive director of the New York State Motor Truck Association, Albany, said the majority of carriers in the state are experiencing lingering symptoms of the 2009 recession. Fuel prices were already high in 2008, she said, so the recession took a toll on carriers when it hit in 2009.
"We saw a nationwide record of companies close their doors," she said, adding that those that didn't close were forced to downsize on staff and equipment. "We're finally starting to see some growth coming back, but it's been slow."
She added that New York state is the second most expensive state, behind Oregon, in which to operate a trucking business. The state is among only four in the country that have a highway use tax, she said, which makes the environment even more challenging.
Federal and state regulations have added an extra layer of concerns for businesses, she said, as businesses that fail to comply with safety policies face costly fines. The state doesn't have a trucking company that ranks in the top 300 nationwide in terms of size, according to a study by Transportation Topics.
"One of the biggest things about New York state is we aren't truck friendly," she said. "There isn't a lot of focus on the importance of the trucking industry for the state's economic growth. We want to raise the level of awareness."
Nevertheless, she said, she expects carriers in the north country to fare well in 2012 with gradual growth. "If things stay the same, we should continue to see growth, barring any unforeseen circumstances," she said.
