Eastern Railroad Discussion > OT? Truckers lay off drivers in "capital discipline" noves

The Wall Street Journal reports that over the road trucking companies are laying off employees, and refusing some loads as they practice capital discipline.  Loads are down for many, but the returns for loads are up. Old Dominion's loads are down 4%, while revenue is up 6%. Major truck fleets laid off about 4,500 people in August.

Fewer new tractors are being purchased, which is rippling into the manufacturing side.  Navistar is laying off UAW workers in its Springfield OH plant as orders drop off. Outside observers believe truck deliveries may be down 31% in 2019, as orders vanish and operators work off earlier deliveries.

The concept of refusing loads or driving away business may not be a purely railroad PSR process.  The local deliery companies find that prospective employees demand training and pay before they will consider employment.


Paywall site:  https://www.wsj.com/articles/truckers-slashed-payrolls-in-august-11567794742?mod=hp_minor_pos14
 

I drive I-75 from Macon to Ocala and back every couple of weeks.  Coming back midday Saturday trucks were almost continuous at times, Old Dominion, in particular as well as FedEx.  One would think that NS and CSX would think of a way to get some of this traffic back on the rails.  John

 

Truckers have been turning down business for as long as I was in corporate transportation (40 years). The turndown would be masked, of course - “we don’t have any equipment available” but; net result was the same.

My personal business theory when dealing with truckers was I never wanted to have the lowest rate on a lane as that practically guaranteed “no capacity” the instant a better paying load materialized. I figured if our rates were within 10% of the lowest we could still be competitive and get our loads covered.

And I was a big believer in developing relationships with our truckers. During the capacity crunch back in 2014 I was able to get loads covered when no one else could simply by drawing on those relationships. I fear this relationship style of business is lost on the younger generation.

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Layoffs...yes, but fewer trucks on the road?  Not from where I sit.  Last thursday, driving I-24 north of Nashville until we headed off towards St Louis, it was NOTHING BUT TRUCKS!  I could see a few cars and one or two motorhomes but there were two and sometimes three lanes of nothing but trucks.  I wish I had taken pictures.

I think a little bit of slow down in new truck purchases has to do with reliability. All of the anti pollution things that are on new trucks now have hurt reliability. The last one the company I worked for bought was new but stayed in the shop for some kind of a problem all the time. It might make 1 complete trip and stay in the shop for a week. When the warranty  ran out and it only had 50,000 miles on it, should have been 150,000. Every time they get the bugs out the law changes on pollution and engines have to be redesigned again. Prices on trucks from the 80’s and 90’ show they are worth now more  than when they were new if the cab and frame are in good shape. You can’t make a Diesel engine that emits 0 pollution, ask the railroads they are rebuilding instead of buying new. I am not getting rid of my 03 Freightliner, it blows a little black smoke but I get 8 to 9 mpg, you’re not getting that with a new one.

Yes.

The article mentions some new truck sales business may have been pulled forward into 2018 and operators are "digesting" those purchases.

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