Trucking keeps on churning

Carriers exit market, which could lead to capacity crunch when economy starts rolling again

At the start of 2008, trucking executives looked forward to an end to the economic downturn by the second quarter. But the elusive recovery proved harder to catch than a Class 8 tractor with no brakes on a downhill grade.

Truckers could only watch as it moved farther toward the horizon, finally disappearing as it zipped past the banking crisis in the third quarter.

As the trucking industry rolls into 2009, it’s clear that there will be much less freight hauled by far fewer trucks as trucking companies and shippers strive to survive the fourth year of a “freight” recession that now grips the entire economy.

As was the case with 2007, 2008 began with trucking companies banking on rates bottoming out as shippers planned to lock in low prices after several years of occupying the short end of the negotiating table.

But aside from a brief volume boost around midyear — propped up in part by fuel surcharge revenue — 2008 turned out to be one of the worst years to be a carrier. More than 3,000 trucking companies went out of business in 2008. They included major names such as Jevic Transportation, which sent a shock wave through the LTL market when it suddenly shut its doors in May. But the majority of the carriers that folded were small companies and owner-operators that couldn’t absorb rapidly increasing fuel prices. Full Story........