In this podcast, Senior Editor William B. Cassidy shares his thoughts on 2010's biggest trucking stories, and gives his predictions for the big stories of 2011. This is the third podcast in a five-part series.
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Freight Transportation podcasts:
Top Trans-Pacific Shipping, Trucking Stories of 2010
Top Rail Regulation, Policy Stories of 2010
Top Trans-Atlantic Shipping Stories of 2010
Top Rail and Intermodal Stories of 2010
Stories by William B. Cassidy:
Big Challenges for Small Carriers
Rocky Road to Safety
Q: Bill what were some of the biggest stories you covered during 2010?
A: I have to say the biggest story was not one particular event but an overall trend and that’s the recovery in the economy and how it affected trucking. Within that the biggest story had to be the survival of YRC Worldwide, the largest U.S. trucking operator, $5.3 billion company in 2009. YRC lost $2.5 billion between 2007 and the third quarter of 2010. It had to go back to the union for three rounds of wage and pension concessions.
A lot of people wrote the company off last year but it managed a major equity swap in the very beginning of 2010, which gave it the liquidity it needed to survive through this year. Just recently won another round of concessions from the teamsters that will help it get into 2011. Now it was the cover story Jan 4, 2010, and it was in the last issue of the 2010 so I think that was one of the bigger stories of the year. It also had a major impact on the rest of the LTL industry.
The last time we had a major recession and a recovery back in the early 2000s there was a major trucking company shutdown. Consolidated Freightways went out of business in September 2003. That threw a lot of freight and market share to other LTL carriers, including the companies that became YRC. This time around that didn’t happen because YRC kept running, which meant that a lot of companies that were banking on YRC going out of business had to go back and rebuild their own business in 2010. It’s really put much more pressure on other LTL carriers to be much more careful about how they price and manage their yield in order to improve profitability. And I think that’s going to be a trend we see continue in 2011.
Q: What do you foresee as the big stories of 2011?
A: A lot of stories that we’ll be covering will be very similar to what I wrote about this year. CSA 2010 and the debate of truck driver availability or constriction on truckload capacity impact on rates in 2009 was an important story. There is reason to believe that we could see a stronger contraction at some point in 2011. When will it come? That’s a big question.
Many observers think that we’re going to see truckload capacity in particular get very tight if there’s a moderate economic recovery or even any sudden disruptions to supply chains, because capacity so much tighter today than it was a year and a half ago. Another story to watch is the rise of intermodal and how supply chains are changing. How shippers are changing the way they fit trucking into their supply chains. We’ve seen a lot of lines between the lines between various types of transportation blurred across distribution channels since the end of the recession. The global economy is changing enough that I think we’re going to see more pressure on shippers to really look for multimodal options rather than doing what they did before the recession, going back to 2006. So that’s going to unfold in an interesting way I’m sure in 2011, especially as we see pressures on truck capacity increase.
A big thing there is hours for service truck drivers and new rules expected next year, it could drop the number of hours that drivers can work per day significantly. A consensus in the industry seems to be that it will probably be a 10-hour work rule, but that’s not the only possibility however. It could also mandate some breaks. It could also change the restart period that truckers have to wait before they can start their clock again in a new week. If that changes it can have a very significant impact on how shippers move their goods between distribution points and how many drivers are needed in the industry. And that’s going to be a big story.