Editorial: Not Without Victims

More proof that the partial government shutdown sparked by the political impasse in Washington isn’t a “victimless crime” comes in the form of our story that U.S. military business with trucking fleets has come to a virtual standstill.

The military spends an estimated $1.9 billion a year on truck transportation, according to estimates from American Trucking Associations. But that business has nosedived because the civilians who normally process those deliveries are among the federal employees on furlough.

ABF Freight System told us that its military business has been cut by two-thirds, to about 100 loads a day.

The heads of some small fleets had even worse news: They sent their drivers home when the military loads disappeared.

The bad news for military carriers came as several public transport companies cut their earnings outlooks as freight levels stagnated.

Knight Transportation lowered its profit estimate by more than 15% for its third quarter, while Hub Group said its net will not exceed 51 cents, below the 55 cents analysts had expected.

Knight cited trouble recruiting qualified drivers as one of the reasons for its lower profitability. It said it was having trouble finding drivers and was having to spend more money to find them.

But the fleet also reported that freight levels and driver recruitment efforts had improved in recent weeks.

On that note, heavy-duty truck orders jumped in September, a month that usually is the second weakest of the year.

September’s total was 27.4% above year-ago levels and exceeded the 20,000 level often cited as the mark of a good month.

This was the eighth consecutive month of year-over-year order growth. And while much of the business is for replacement vehicles and not growth, the orders strength still is good news for the industry.

But here again, ACT Research, which compiled the orders data, warned that the government shutdown could quickly become a problem.

“The longer this goes on, the more it becomes a drag on business confidence,” an ACT official said. And that will lead to lower truck orders and sales, he added.

As Transport Topics was going to press, there were the first glimmers of a potential settlement — albeit a temporary one — in the budget impasse.

Let’s hope that the shutdown and the threat of a federal debt default are history by the time you read this.