February Truck Layoffs Hit 33,400; Jobs at Lowest Level Since ’96

This story appears in the March 16 print edition of Transport Topics.

Job losses in the trucking sector continued to mount in February as trucking firms had the most layoffs in history for a month without strikes.

In its monthly report on unemployment, the Bureau of Labor Statistics said employment related to truck transportation fell by 33,400 jobs in February to 1.282 million — the lowest level since December 1996.

The February decline was the second record drop in truck-related employment, following a loss of 24,900 jobs in January, which was the biggest drop except for one month in 1994 when the Teamsters union went on strike.

American Trucking Associations Chief Economist Bob Costello said the back-to-back declines were “astounding” and the result of depressed freight volumes.

“Fleets are reacting to freight levels that are off significantly,” he said.

ATA reported that truck tonnage fell in January for the fourth month in a row, sinking 10.8% compared with 2008 (click here for previous story).

The Department of Transportation’s Bureau of Transportation Statistics said that its measure of freight movement also fell in January.

The Freight Transportation Services Index fell 2.3% from December, the fifth decline in the past six months, and was down 7.8% from last January, DOT reported.

The transportation index, which measures data from for-hire trucking, rail and inland waterway carriers, pipelines and air freight, was at its lowest level since March 2003.

Retail sales, another important economic measure for trucking, dropped 0.1% in February, after a revised 1.8% increase in January, the Commerce Department said March 12.

Analyst Ed Wolfe of Wolfe Re-search said March 9 that he was assuming “virtually no improvement in the current weak demand environment” in coming months.

“That is, no increase in freight volumes from inventory restocking, monetary, fiscal or infrastructure stimulus, increasing credit flows or other improvements in the economy,” Wolfe wrote in a letter to clients.

The mounting bad news was unlikely to help trucking reverse its employment slide, Costello said.

“Labor trends in general are certainly not leading economic indicators; they’re lagging indicators,” Costello said. “You don’t drop employment levels today because you think freight’s going to be off next month. It’s sort of like, ‘Oh, freight’s been off for a while now; we’ve got to shrink.’ ”

The economy at large may recover faster than trucking’s job totals, Costello also said, because “you want to make sure that the turnaround is sustainable before you start hiring people.”

Overall employment across the economy fell by 651,000 jobs in February, pushing the unemployment rate up to 8.1%, its highest point since December 1983.

The transportation and warehousing sector, which includes trucking, added 49,000 layoffs.

The manufacturing and construction sectors, important customer bases for trucking, tallied 168,000 and 104,000 layoffs, respectively, in February.

Since the recession began in December 2007, trucking has had a net loss of 160,800 jobs, with 65% of them, or 104,700, in the past six months.

To calculate the number of truck-related job losses, BLS economist Christopher Goodman said, the agency uses statistical models with “historical data” because, in its monthly survey, BLS finds that “it’s hard to tell who exactly has gone out of business and who just didn’t report that month.”

Costello said that the job-loss number reflects both job cuts at large carriers and shuttering of smaller fleets.

“We know that fleets are shrinking, and we also know that bankruptcies have got to be fairly high this year, so I would suspect that both are impacting this,” Costello said, adding that he “wouldn’t be surprised if a good chunk of that was companies going out of business.”

In the most recent report compiled by Avondale Partners, 3,065 carriers failed in 2008.

Several economists and analysts said they expect a new wave of bankruptcies in the first quarter as tonnage levels and rates both fell (click here for previous story).